Posts Tagged ‘The Feds’

When Politico Bumbles Really Easy Lehman News

When Politico Bumbles Really Easy Lehman News

Courtesy of Jr. Deputy Accountant

"the feds" not "the Fed" which would be this guy

Psst, it’s "the Fed" not "the feds" and if you aren’t clear on the difference, perhaps A) we need to talk and B) you shouldn’t be writing about things you do not understand. Très sloppy of you, Politico, I’d be ashamed but I am not affiliated with your prestigious online publication and have my own sh*t to be ashamed about.

Former Lehman Brothers Chief Executive Officer Richard Fuld defiantly told a financial inquiry panel Wednesday his company could have survived the 2008 financial meltdown if it had only received some cash from the feds.

He told the Financial Crisis Inquiry Commission Wednesday afternoon that the company failed only because it was denied support given to its competitors, like Morgan Stanley and Goldman Sachs. He said the company made some mistakes, but those errors were also made by its competitors and by government officials.

The remarks in a Senate hearing room show that Fuld is still angry over the fact that Lehman was allowed to fail while other big banks got a government bailout.

“The big mistake that was made was that Lehman, as a sound company, was mandated to file for bankruptcy,” he said. The company had “derisked” in 2007 and 2008, he said, and added that he never received a negative assessment of the company’s amount and quality of collateral, which the Fed says was insufficient.

Once again, let’s go over it. The feds = those guys who investigate mafia murders. The Fed = those guys who murder the purchasing power of the dollar. Got it? Not the same. I know it’s really confusing since the Fed uses that whole .gov we’re government we swear crap, but come on, even my 7 year old knows Obama isn’t Ben Bernanke’s boss. Well, of course my 7 year old does, maybe he should be writing for Politico instead of this Simmi Aujla hack who doesn’t know the difference between "feds" and "the Fed"?

You fail, Politico. Worse than Lehman did. 

 


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Government Created the Mega-Banks

Government Created the Mega-Banks

too big to failCourtesy of Washington’s Blog

As Simon Johnson has previously pointed out, the White House has pretty much admitted that the government created the mega-giants, and they are not the product of free market competition.

Now Treasury has made pretty much the same point:

"The growth of the major financial firms over the past few decades — including Fannie Mae, Freddie Mac, and the major investment banks — also likely stemmed in part from the assumption by investors and counterparties that these firms would receive government assistance if they became troubled," assistant treasury secretary Michael Barr said at a speech earlier this month at the National Economists Club.

Indeed:

A recent paper by Baker and Travis McArthur shows that the too-big-too-fail guarantee also allows GSE banks to access capital cheaper than regular banks. The difference over the last several quarters adds up to an annual $34.16 billion taxpayer subsidy to major banks — roughly half of their projected profits. That subsidy is more than twice what taxpayers spend on the major welfare program, Temporary Assistance to Needy Families.

"Private banks can’t compete with a GSE," said Whalen.

Major banks have been able to sell toxic assets to the Federal Reserve and also have access to capital at close-to-zero percent interest rates from the Fed. By using zero-percent money from the Fed and lending it back to the U.S. government by buying Treasuries that pay higher rates, banks can squeeze out an extra subsidy. But there is no way of knowing how much of that capital banks have taken advantage of because the Fed doesn’t make the information available.

"The numbers in [the report] suggest that to a large extent the recent rise in the profitability of the TBTF banks may be attributable to the fact that they enjoy the protection of the government’s backing at a time when the banking system as a whole continues to experience substantial strains," write Baker and McArthur. "This should concern policymakers, since it would imply that a substantial portion of the profits of the largest banks is essentially a redistribution from taxpayers to the banks, rather than the outcome of market transactions. It is not clear that Congress and the public would support this redistribution if they realized that it was taking place."

Read more at: http://www.huffingtonpost.com/2009/10/15/fannie-freddie-and-citi-t_n_322603.html

The Too Big To Fails are Titanic Because of The Feds.

 


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ValueWalk

Goldman Raking in Billions As Workers Face Looming Aid Cut

By Anna Peel. Originally published at ValueWalk.

WASHINGTON, D.C. – Amid a global pandemic and economic crisis hurting small businesses and workers across the country, Goldman Sachs reported “blowout second-quarter earnings” today, raking in a whopping $2.42 billion in profit — a boon CNBC is calling the mega bank’s “biggest earnings outperformance in nearly a decade.” Goldman Sachs was able to capitalize on the trillions of dollars the Federal Reserve and the Trump administration inje...



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Kimble Charting Solutions

Junior Gold Miners Working On 7-Year Breakout!

Courtesy of Chris Kimble

Its been a long 7-years if you happened to buy Junior miners ETF (GDXJ) back in 2013, as it has traded sideways since those highs.

This chart comes from Marketsmith.com, which reflects that GDXJ is trading above long-term moving averages and its relative strength continues to push higher.

GDXJ has spent the majority of the past 7-years inside of the trading range (1).

The rally off the bottom of the range in March, has GDXJ working on an upside breakout of this trading range at (2).

A...



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Zero Hedge

Gary Shilling: The Social Security's Funding Crisis Has Arrived

Courtesy of ZeroHedge View original post here.

Authored by A. Gary Shilling, originally published in Bloomberg Opinion

The Social Security Trust Fund has done quite well in recent years, due to the postwar babies’ surge into the labor force in the last decades of the 20th century while retirees from the low-birth rate Great Depression years were drawing relatively few benefits. The combination of these two forces pushed the Social Security Trust Fund balance from about zero in ...



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The Technical Traders

Second Phase Real Estate Collapse Pending

Courtesy of Technical Traders

Real estate, especially commercial real estate, is likely to be the first segment of the real estate market to enter the second phase of an extended collapse.  The COVID-19 virus has created an atmosphere where continuing operations for retail, restaurants, and many other business segments is virtually impossible to maintain.  Without the ability to earn sufficient income, thousands of restaurants and other retail businesses have already closed or are in the process of closing.  This has pushed the commercial real estate market into turmoil.  We believe the residential real estate market will follow the commercial market because consumers are going to suffer as commercial real estate collapses....



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Phil's Favorites

The Future Of Remote Work, According To Startups

Courtesy of Visual Capitalist's Theresa A.G. Wood

No matter where in the world you log in from—Silicon Valley, London, and beyond—COVID-19 has triggered a mass exodus from traditional office life. Now that the lucky among us have settled into remote work, many are left wondering if this massive, inadvertent work-from-home experiment will change work for good.

In the following charts, we feature data from a comprehensive survey conducted by UK-based startup network Founders Forum, in which hundreds of founders and their teams revealed their experiences of remote work and their plans for a ...



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Biotech/COVID-19

While coronavirus cases spike in the South, the Northeast seems to have it under control - here's what changed

 

While coronavirus cases spike in the South, the Northeast seems to have it under control - here's what changed

Face masks and social distancing have become the norm in New York City. Noam Galai/Getty Images

Courtesy of Taison Bell, University of Virginia

Hospital Capacity Crosses Tipping Point in U.S. Coronavirus Hot Spots” – Wall Street Journal

This is a head...



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Digital Currencies

Chainlink Crypto Surges To A New All-Time High - Here's Why...

Courtesy of ZeroHedge View original post here.

Authored by Joseph Young via CoinTelegraph.com,

Surging volume, price discovery, and new partnerships pushed Chainlink price to a new all-time high at $8.48...

image courtesy of CoinTelegraph

...

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Chart School

Dow 2020 Crash Watch - Update

Courtesy of Read the Ticker

Like 1929 the markets have bounced. This time it is on the back of the FED $6.5T money printing.

Previous Post: Dow 2020 Crash Watch 

But can the FED blow $6T every time the market rolls down to test support.

Yes, maybe before the US 2020 elections the FED will do 'what it takes'. But post elections not so much, the year 2021 is a long way from the next election (presidential or congress) and defense of the markets may not be so supportive at $6T or $10T per market smash. The FED may hesitate, and that will be window for stocks to break lower.

The 36 month simple moving a...

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Lee's Free Thinking

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

 

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

Courtesy of  

The COVID 19 pandemic is, predictably, worsening again in much of the US. Only the Northeast, and to a lesser extent some Midwestern states, have been consistently improving. And that trend could also reverse as those states fully reopen.

The problem in the US seems to be widespread public resistance to recommended practices of social distancing and mask wearing. In countries where these practices have been practi...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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