Daily Digest

Daily Digest - August 28

Friday, August 28, 2009, 11:01 AM
  • Creative Destruction: Bloggers Know the Problem and the Solution (Video, Repost)
  • Peter Schiff Vlog-Traitor Bernanke gets the nod (H/T iDoctor, Video)
  • How to Play the Corporate Shell Game....
  • Preparing For The Worst
  • FDIC Running Out of Cash
  • 24% of U.S. Workers Surveyed Have Only One Week or Less of Savings
  • FDIC Lowers Qualifications for Failed Bank Acquisitions
  • Report: Mortgage Delinquencies Increase in July
  • Almost One-Third of Banks Rated F, Chris Whalen
  • New Home Sales (Reality Chart)
  • Federal Reserve Fights Judge to Hide Secrets

Economy

Creative Destruction, Bloggers Know the Problem and the Solution (* * * * Video, Repost)

Four Star Video on page

Peter Schiff Vlog - Traitor Bernanke Gets The Nod (H/T iDoctor, Video)

How to Play the Corporate Shell Game....

When I was in college I taught flying for Louisiana Tech University and then moved on to flying corporate aircraft prior to entering the U.S. Air Force. One of the people I flew for owned construction equipment and built roads and bridges for the state of Louisiana.

We would routinely fly to Baton Rouge, the state capital, and bring boxes of peaches to the politician’s offices. My boss was not only handing out peaches.

In return, he would receive inside information on SEALED bids. I’m not kidding, and he was caught and fined for this on at least one occasion that I know of.

Not only did he do that, but he mastered the corporate shell game. What he would do is start a corporation just to bid on a large project. If he won the bid, he would “buy” the equipment from his last corporation, thus he could depreciate the same assets again. Meanwhile, in his old corporation the money received was never enough to pay off his creditors and he would simply bankrupt the company leaving behind debt to those who were unwittingly providing credit to his shell corporation. He did this repeatedly and would move assets around like crazy, even trading road building equipment for the airplane that I flew. Of course Louisiana had dirty money everywhere at the time, including a famously filthy-dirty governor.

Preparing for the Worst

FDIC Running Out of Cash

The FDIC is estimated it will need $70 billion to cover bank failures through 2013 — about 5X recent cash holdings of $13 billion. Through March 2009, the FDIC recorded over $19 billion in losses. The most recent failure is Texas Guaranty Bank, at a cost to the agency’s insurance fund of $3 billion dollars.

The FDIC is one of those rare regulatory agencies that operates, for the vast majority of the time, without taxpayer funding. Bank fees pay for the insurance of the Federal Deposit guarantees.

 From the Coming Depression Blog: 24% of U.S. Workers Surveyed Have Only ONe Week or Less of Savings

One Week or Less: 34%

* 2-4 Weeks: 16%

* 1-2 Months: 16%

* 3-5 Months: 14 %

* 6 Months or Longer: 20%

FDIC Lowers Qualifications for Failed Bank Acquisitions

The Federal Deposit Insurance Corp. approved guidelines for private-equity firms to buy failed banks ... agreeing to lower to 10 percent from the proposed 15 percent the Tier 1 capital ratio private-equity investors must maintain after buying a bank.

Report: Mortgage Delinquencies increase in July

Among U.S. homeowners with mortgages, a record 7.32 percent were at least 30 days late on payments in July, up from about 4.5 percent a year earlier and 7.23 percent in June, according to monthly data from the Equifax credit bureau.

Almost 1/3 of Banks Rated F; Chris Whalen

Chart on page

New Home Sales (Reality Chart)

Federal Reserve Fights Judge to Hide Secrets

Given the trillions of dollars which the private bankers of the Federal Reserve have pillaged from the U.S. Treasury (over $4 trillion, and counting), clearly the Fed can afford to hire the best lawyers “money can buy”. Thus, when we see the pathetic excuses being put forward by these lawyers to attempt to justify the Fed's decision to continue hiding what it did with its “emergency lending” operations, it essentially confirms there is no justification.

The first “reason” cited by these lawyers to justify hiding what the Fed did with the taxpayer dollars it used to prop-up U.S. banks (primarily Wall Street) is that disclosing this information would “impair” the Fed's “ability to manage the current, and any future financial crisis.” It then warned that disclosing its actions could also “harm the U.S. economy”. It provided no explanation of any kind as to how either it or the U.S. economy would be harmed.

15 Comments

ELIZABETH S.'s picture
ELIZABETH S.
Status: Member (Offline)
Joined: Jul 15 2008
Posts: 23
Re: Daily Digest - August 28

I'm frankly fed up with "The Fed".

mattahern's picture
mattahern
Status: Member (Offline)
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Posts: 1
Re: Daily Digest - August 28

Mobster do the same thing - delay in court while they hide assets and the "real" books

ernie's picture
ernie
Status: Bronze Member (Offline)
Joined: Feb 18 2009
Posts: 39
Re: Daily Digest - August 28

So is that an admission from their lawyers that the Fed has done things that could harm the US economy if disclosed? How irresponsible is that! The public should be outraged.

 

 

 

 

 

 

nickbert's picture
nickbert
Status: Diamond Member (Offline)
Joined: Jan 14 2009
Posts: 1208
Re: Daily Digest - August 28

Wall Streets High-Tech War on Investors

http://articles.moneycentral.msn.com/Investing/CompanyFocus/wall-sreets-high-tech-war-on-investors.aspx

Another unusual find in MSM, this time acknowledging the widespread use (and unfairness) of HFT or high frequency trading.  On the third page the risk of HFT triggering (or amplifying) a major meltdown is discussed... I honestly don't know enough to say if this is a major risk or not, but I acknowledge at least the possibility.

- Nickbert

Dragline's picture
Dragline
Status: Bronze Member (Offline)
Joined: Sep 10 2008
Posts: 54
Re: Daily Digest - August 28

Here is the opinion where Judge Preska orders the Fed to release certain records to Bloomberg:

http://amlawdaily.typepad.com/bloombergFOIA.pdf

An appeal is expected.

jimh54's picture
jimh54
Status: Member (Offline)
Joined: Jan 16 2009
Posts: 2
Re: Daily Digest - August 28

There's light at the end of the tunnel. Congress says it will audit the FED.

http://rawstory.com/08/news/2009/08/28/rep-frank-house-will-pass-ron-pau...

rockitsteveo's picture
rockitsteveo
Status: Member (Offline)
Joined: Jun 18 2009
Posts: 2
Re: Daily Digest - August 28

Federal Reserve Fights Judge to Hide Secrets

Given the trillions of dollars which the private bankers of the Federal Reserve have pillaged from the U.S. Treasury (over $4 trillion, and counting), clearly the Fed can afford to hire the best lawyers “money can buy”. Thus, when we see the pathetic excuses being put forward by these lawyers to attempt to justify the Fed's decision to continue hiding what it did with its “emergency lending” operations, it essentially confirms there is no justification.

The first “reason” cited by these lawyers to justify hiding what the Fed did with the taxpayer dollars it used to prop-up U.S. banks (primarily Wall Street) is that disclosing this information would “impair” the Fed's “ability to manage the current, and any future financial crisis.” It then warned that disclosing its actions could also “harm the U.S. economy”. It provided no explanation of any kind as to how either it or the U.S. economy would be harmed.

SAME AS IT EVER WAS...SAME AS IT EVER WAS

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Nime's picture
Nime
Status: Bronze Member (Offline)
Joined: Jan 29 2009
Posts: 88
Re: Daily Digest - August 28

http://www.insidescience.org/research/study_says_world_s_stocks_controll...

Scientists analyzed ownership of thousands of major companies down to two levels and came up with the conclusion that most of world's busienss is owned by very few people.

hucklejohn's picture
hucklejohn
Status: Gold Member (Offline)
Joined: Dec 13 2008
Posts: 281
The Metastasis of Moral Hazard and its Effect on Gold

http://www.kitco.com/ind/Dougherty/aug262009.html

This article is long but it sums up the big picture of not only Wall Street & Washington corruption but its spread throughout society.

"To those who study the numbers, it is now obvious that America’s fiscal situation is hopeless. Given the country’s current debt and unfunded liabilities of $75,000,000,000,000, an amount growing by at least $5,000,000,000,000 per year, it will be statistically impossible for the United States to pay its obligations unless it repudiates them in large measure, or the dollar is sacrificed on the altar of searing, society-altering inflation.

"Congress and much of the nation are in utter denial about the country’s unfolding fiscal catastrophe, as evidenced by federal spending that is actually accelerating, producing all-time debt and deficit records that exceed anything ever experienced by any nation on earth, at any time in history."

Ignignokt's picture
Ignignokt
Status: Member (Offline)
Joined: Aug 12 2009
Posts: 16
Re: Daily Digest - August 28

The Friday slaughters continue...3 more banks close for a total of 84 for the year! Another Billion+ from the FDIC fund.  What are we down to 9 Billion in their credit line? Surprised this isn't on Bloomberg yet...maybe more coming??

http://www.startribune.com/local/55897482.html

 

Sandman3369's picture
Sandman3369
Status: Bronze Member (Offline)
Joined: Dec 21 2008
Posts: 71
Re: Daily Digest - August 28

+1, 'bout time someone said that! 's'

Sandman3369's picture
Sandman3369
Status: Bronze Member (Offline)
Joined: Dec 21 2008
Posts: 71
Re: Daily Digest - August 28

Whoops, should have specified the first commenter, Kat?
Anyway, you know TSjustHTF, when Rep. Frank says Rep. Paul's bill is going through.
The banks will all fall on their swords before they let us know what they have been doing.
Reminds me of an old Iron Maiden song... "Run to the Hills"

Sandman3369's picture
Sandman3369
Status: Bronze Member (Offline)
Joined: Dec 21 2008
Posts: 71
Re: Daily Digest - August 28

Actually, isn't the FDIC broke? I have a list of Funny things we should be more concerned about than arguing about Funny money. Freedom, 'F'ilosophy, Family, Friends, Food, Firearms, Farming, Foraging, 'F'hilanthropy, 'F'ysics (Inertia and Thermodynamics specifically when in relation to the economy because there is no Motion), Fungi (just in case!), the Future and of course, our Fathers (all of whom are rolling in their graves). What has already happened, or as many mistakenly see, what is happening now, is the ultimate travesty. It is already to late to do anything to prevent it or to fix it. However, being American, and an Independent Free Man, I believe that we all should withdraw from their game (as my sig has shown). We are their powerbase. Without us.... their money really is nothing. In the spirit of Ghandi and non-violence, pull the rug out from under their feet. Just think of those two rich wives who had to stand in line a couple of weeks ago. All those 0's and 1's disappear and it's over for the tyrants, their yes-men and sycophants. Finance is actually the last F that is of any importance. I'm sure you can think of other F's, actually, Fanaticism and Fascism fall below Finance. AAHHH, Finally, i am Finished...

JAG's picture
JAG
Status: Diamond Member (Offline)
Joined: Oct 26 2008
Posts: 2492
Deficits Saved The World!

Davos,

You should appreciate this one, Krugman just jumped aboard Uncle Ben's bandwagon, surprise, surprise!

Paul Krugman: Deficits Saved The World

(I'm withholding comment so as to make the moderator's job a little easier)

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Deficits Saved The World!
JAG wrote:

Davos,

You should appreciate this one, Krugman just jumped aboard Uncle Ben's bandwagon, surprise, surprise!

Paul Krugman: Deficits Saved The World

(I'm withholding comment so as to make the moderator's job a little easier)

Dinner at the White House must have been good.

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