Daily Digest

Daily Digest - Apr 21

Tuesday, April 21, 2009, 9:49 AM
  • Welcome to the exponential function, we hope you enjoy your stay…(H/T CM)
  • 60 Minutes - Cold Fusion is Hot Again...(Video)
  • Big bank profits are bogus!
  • “I Trusted Authority. I Trusted the System." (Video)
  • Uncle Jay Explains the News 2:21 Tea Party Video
  • U.S. may convert banks’ bailouts to equity share
  • BofA: $13.4 billion in Credit-loss provisions
  • The First Step to Fixing the Economy - Correctly Identify the Problem (This might be a first step)
  • Public Pension Shakedown?
  • Owen  Payne Accountants (Video, Humor, check out the surprised looks)
  • Will Bank “Stress Tests” Kill Market…or Government Credibility? (Video)

Economy

Welcome to the exponential function, we hope you enjoy your stay…(H/T CM)

More babies were born in the United States in 2007 than in any other year in American history, according to preliminary data reported Wednesday by the National Center for Health Statistics.

The 4,317,000 births in 2007 just edged out the figure for 1957, at the height of the baby boom. The increase reflected a slight rise in childbearing by women of all ages, including those in their 30s and 40s, and a record share of births to unmarried women.

But in contrast with the culturally transforming postwar boom, when a smaller population of women bore an average of three or four children, the recent increase mainly reflects a larger population of women of childbearing age, said Stephanie J. Ventura, chief of reproductive statistics at the center and an author of the new report. Today, the average woman has 2.1 children.

60 Minutes - Cold Fusion is Hot Again...(Video)

Big bank profits are bogus!

A big bank CEO on a mission to deceive the public doesn't have to tell outright lies. He can con people just as easily by using "perfectly legal" tricks, shams, and accounting ruses.

First, I'll give you the big-picture facts. Then, I'll show you how big U.S. banks are painting lipstick on some of the fattest pigs ever raised.

“I Trusted Authority. I Trusted the System." (Video)

Uncle Jay Explains the News 2:21 Tea Party Video

U.S. may convert banks’ bailouts to equity share

WASHINGTON - President Obama’s top economic advisers have determined that they can shore up the nation’s banking system without having to ask Congress for more money any time soon, according to administration officials.

In a significant shift, White House and Treasury Department officials now say they can stretch what is left of the $700 billion financial bailout fund further than they had expected a few months ago, simply by converting the government’s existing loans to the nation’s 19 biggest banks into common stock.

Converting those loans to common shares would turn the federal aid into available capital for a bank — and give the government a large ownership stake in return.

BofA: $13.4 billion in Credit-loss provisions

From CNBC: BofA Tops Forecasts with Help from Merrill

While results topped analysts' forecasts, they were bolstered by one-time events, including a $1.9 billion gain from selling shares of China Construction Bank and $2.2 billion of gains tied to widening credit spreads.

Bank of America set aside $13.38 billion for credit losses in the quarter, up from the fourth quarter's $8.54 billion.

Credit quality deteriorated broadly as the economy weakened, housing prices fell and unemployment rose.

Net charge-offs rose to $6.94 billion from $2.72 billion a year earlier. Nonperforming assets more than tripled to $25.74 billion, and rose $7.51 from year-end.

Bank of America's credit card business lost $1.77 billion in the quarter.

"We continue to face extremely difficult challenges, primarily from deteriorating credit quality driven by weakness in the economy and growing unemployment," Lewis said.

The confessional is still open.

The First Step to Fixing the Economy - Correctly Identify the Problem (This might be a first step)

Last month, a media executive met with a headhunter to plan his next career move. With years of experience at a major media organization, the executive figured that he had some good ammo to jump to the next level, even in the current economic climate.

The meeting did not go well.

“The headhunter essentially told me not to even bother trying,” says the executive. “He told me, ‘The old media model is broken.’ The message was that there really isn’t a next step to take.”

Public Pension Shakedown?

The WSJ reports on the public pension shakedown:

President Obama's auto fix-it man, Steven Rattner, is in the news as one of the Wall Street financiers hit up for big money as part of New York state's unfolding pension-kickback scandal. The White House says he's done nothing wrong, and there's no public evidence that he broke any laws.

But Mr. Rattner's high profile is nonetheless useful in drawing attention to the real story here, which is the growing evidence of corruption by officials who use their power over public pension funds to shake down private companies. This is the same political class that has been blaming banks for "greed" in the financial crisis. The pension fund scandal exposes the myth of the superior virtue of the public and nonprofit worlds. Greed is universal. And the opportunity for corruption is enormous when political discretion is tied to vast sums of public money.

New York Attorney General Andrew Cuomo and the Securities and Exchange Commission allege that investment firms paid politically connected "placement agents" in return for a piece of New York's $122 billion pension fund. The AG has indicted three politicos for kickbacks, but the media have focused on the private firms that hired some of these political agents. Thus the attention on Mr. Rattner, who as co-founder of the Quadrangle investment firm met with a consultant about paying a finder's fee for pension cash.

Owen  Payne Accountants (Video, Humor, Check out the surprised looks)

Will Bank “Stress Tests” Kill Market…or Government Credibility? (Video)

12 Comments

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - Apr 21

Today in the news: Santa Clause, the Tooth Ferry and the Easter Bunny...

The story that caught my eye was in an economic blog where a media executive went to the head hunter to get a better job and was bluntly told not to bother, that the media model is broken. Gee, ya don't say. Cramer is still pimping Santa Clause, the Tooth Ferry and the Easter Bunny. Thank God for super economic blogs!

Still telling the story for the broken media model to propagate are the banks. Well at least they aren't accepting Liar Loans anymore (or so I hope). Since I didn't find out the truth about Santa Clause, the Tooth Ferry and the Easter Bunny all at once I can't expect the banks to stop lying about profits and who they loan money to all at once.

As Soros says, the markets are always wrong, well at least we know why.

I really liked the second hour of the FSN newshour where Chris and Jim really nailed it - we need to look at good data to get a good idea what is going on.

Take care

AZDan's picture
AZDan
Status: Member (Offline)
Joined: Nov 26 2008
Posts: 11
Re: Daily Digest - Apr 21

This is what caught my eye

In a significant shift, White House and Treasury Department officials now say they can stretch what is left of the $700 billion financial bailout fund further than they had expected a few months ago, simply by converting the government’s existing loans to the nation’s 19 biggest banks into common stock.

Converting those loans to common shares would turn the federal aid into available capital for a bank — and give the government a large ownership stake in return.

What they fail to mention is that if and when those banks go bankrupt, the loans would have to be addressed as part of the liquidation.  The common stock would be worthless.  The looting continues.

hucklejohn's picture
hucklejohn
Status: Gold Member (Offline)
Joined: Dec 13 2008
Posts: 281
Re: Daily Digest - Apr 21

Yes, the looting continues.  Here is a link to an audio of interview with Dylan Ratigan.  I am not familiar with him.   I understand he wrote about the Enron scandle.  He recently left CNBC.  He calls for more transparency in government among other things:

http://www.fedupusa.info/Dylan_Ratigan_Interview

 

mcafeejs's picture
mcafeejs
Status: Bronze Member (Offline)
Joined: Sep 21 2008
Posts: 34
Re: Daily Digest - Apr 21
AZDan wrote:

This is what caught my eye

In a significant shift, White House and Treasury Department officials now say they can stretch what is left of the $700 billion financial bailout fund further than they had expected a few months ago, simply by converting the government’s existing loans to the nation’s 19 biggest banks into common stock.

Converting those loans to common shares would turn the federal aid into available capital for a bank — and give the government a large ownership stake in return.

What they fail to mention is that if and when those banks go bankrupt, the loans would have to be addressed as part of the liquidation.  The common stock would be worthless.  The looting continues.

What they also fail to mention is the money it took to buy Congress to pass the bailout against the vehement and overwhelming opposition of the electorate at the time.  It seemed to me that with all the deflation happening during this time period that the price to sell a principled decision/vote against the threat of an angry electorate was inflating very high.  How do those $'s translate into political victories anyways?  Of course who do we have to blame since we put the same "individuals" right back in office a few months later.   Both main party candidates were for the bailout.  Not that it would matter, since the Fed/Treasury are appointed/not elected.  Seem's to me that the policy the FED is following is the same as before the election. Indeed quite a few things are the same.  Tarp bill 

stormmind's picture
stormmind
Status: Member (Offline)
Joined: Apr 21 2009
Posts: 1
No more Bill Gates

 

  • Gary Shapiro: Government has been rushing around bailing out failing companies
  • He says U.S. has thrived because of its creative entrepreneurial tradition
  • Massive government spending will deprive entrepreneurs of financing for new ideas
  • Shapiro: Next generation won't have a Bill Gates or a Steve Jobs

edition.cnn.com/2009/POLITICS/04/16/shapiro.entrepreneurs/index.html

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: No more Bill Gates

 

 Shapiro: Next generation won't have a Bill Gates or a Steve Jobs

 

Good! Maybe we can lose the blue screens of death and maybe art (Macs) wont cost so much either. Personally, I prefer the Allen's and the Woz's of the world...

that1guy's picture
that1guy
Status: Gold Member (Offline)
Joined: Jan 11 2009
Posts: 333
Re: Daily Digest - Apr 21

that owen and payne video is awesome....

fujisan's picture
fujisan
Status: Gold Member (Offline)
Joined: Nov 5 2008
Posts: 296
Re: Daily Digest - Apr 21

 YouTube - Max Keiser on System Corruption & Collateralized Commodity Obligations

Max Keiser is reffering the WSJ about Collateralized-Commodity-Obligations / Commodity-Backed-Securities.

Is it just propaganda or what?

If he's correct, then this is totally insane.

fujisan's picture
fujisan
Status: Gold Member (Offline)
Joined: Nov 5 2008
Posts: 296
Re: Daily Digest - Apr 21

 Vast majorities - Paul Krugman Blog - NYTimes.com

Quote:

So the market was greatly reassured when Tim Geithner declared that the “vast majority” of banks are well capitalized. Count me as baffled. I mean, maybe he was actually giving us a hint about the stress tests — but I took it as a remark that was uninformative at best, ominous at worst.

After all, there are a lot of banks in America. There are 1,722 institutions on the Fed’s list of “large commercial banks”. And I have no doubt that most of these banks — indeed, the vast majority — are in fine shape. That’s because they’re regional institutions that never got into the risky games played by the big guys.

But the big guys are where the money is. The top 10 institutions on that list have 58 percent of the assets. (If we looked at bank holding companies rather than only commercial banks, assets would be even more concentrated.) So it’s perfectly possible that the “vast majority” of US banks are well-capitalized, but that banks with, say, a third of the system’s assets are insolvent.

What Geithner said, then, was true but useless. If anything, his wording was cause for concern: Treasury knows the difference between raw numbers of banks and asset holdings, even if the press seemed to miss the distinction, and if he’d meant to say that the vast majority of assets are held by sound banks, he would have.

flavian's picture
flavian
Status: Bronze Member (Offline)
Joined: Nov 20 2008
Posts: 29
Re: Daily Digest - Apr 21

Will Bank “Stress Tests” Kill Market…or Government Credibility?

How about both ...  :)

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - Apr 21

 If bad spelling means your from Transilvania then we must be neighbors.

I'll be posting this in the 23rd blog but I thougth it was of interest...Acting CFO of Freddie Mac commits suicide Sounds so Enronesque with respect to Clifff Baxter. Personal problems or gobbs of losses about to come out?

Bill85's picture
Bill85
Status: Member (Offline)
Joined: Sep 7 2008
Posts: 13
Re: The Headhunter Story

The traditional media model has not buckled! It has been corrupted like our Constitution! It's not going to take some college kid with a new model to "fix" the news media! Just get back to the original purpose of the media model..........honest, fair & unbiased presentation of facts!

When I was about 10 years old I read a copy of the National Enquirer my mom had lying around. (pun intended) Even at that young age I knew that most of what was written there could not be trusted. Back then, mainstream news media still had some semblance of honesty and integrity. That same mainstream news media today looks more like the National Enquirer did when I was 10 years old. It's disgusting and there are not enough minutes left in my life to waste one of them on the mainstream news media.

What the media needs are editors and producers that can suppress the idealism, extremism, activism and ego of their so called journalists. Only then will they attract enough viewers, subscribers and *advertisers* to allow someone to once again aspire to be the style editor for the NY Times! Give me the honest, unbiased facts and allow *me* to think rather than telling me *what* to think!

The "business model" for success already exists in their own archives!

 

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