Listen to last nights national "The Financial Physician" radio program on XM Satellite Radio.
Monday, September 7, 2009
Wall Street To Trade In "Death Bonds"
Wall Street financial engineers have destroyed the world with derivatives and now they want to trade in death. These people must be stopped.-Lou'Life settlements' bonds could be Wall Street's next big act
SAN FRANCISCO (MarketWatch) - Wall Street is developing a product that packages life-insurance policies into investable bonds, and the plan already is generating controversy, according to a media report Sunday.
Investment banks expect to buy life insurance policies that ill and elderly people sell for cash, then package hundreds or thousands of them into bonds. Institutional and other buyers would be the primary buyers of these bonds, receiving a payout when people with the insurance die, the New York Times reported in its online edition.
With $26 trillion of life insurance policies in force in the U.S., the market for these "life settlements" bonds could be immense, the Times said.
Investment banks stand to profit from the creation, sale and trading of the bonds.
Wall Street has been searching for a product to replace the once-lucrative mortgage business, and life settlements policies are being seen as the answer, the Times said.
The article cited industry predictions that the market for the bonds could reach $500 billion. It noted that Credit Suisse Group, for example, bought a firm that originates life settlements and has dedicated efforts to structuring deals and selling the bonds.
In addition, Goldman Sachs Group Inc. has developed a tradable index of life settlements, allowing investors to bet on whether people will live longer than expected or die sooner than planned, the Times said, adding that spokesmen for Credit Suisse and Goldman Sachs declined to comment.
The report said that investment banks are following the model used with the packaging of subprime mortgages, which were supposed to be high-quality and less risky, but proved otherwise.
China Fed Up With US
China holds our economic future in their hands. This is a national security issue. They hold over a $trillion of our Treasury and Agency debt and can dump it at anytime crashing the dollar and causing interest rates to skyrocket. If China does not show up at our autions (and they are not lately) the Fed will be the buyer of last resort (with printed money). We are in big trouble folks.-Lou
China alarmed by US money printing
The US Federal Reserve's policy of printing money to buy Treasury debt threatens to set off a serious decline of the dollar and compel China to redesign its foreign reserve policy, according to a top member of the Communist hierarchy.
Cheng Siwei, former vice-chairman of the Standing Committee and now head of China's green energy drive, said Beijing was dismayed by the Fed's recourse to "credit easing".
"We hope there will be a change in monetary policy as soon as they have positive growth again," he said at the Ambrosetti Workshop, a policy gathering on Lake Como.
"If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies," he said.
China's reserves are more than – $2 trillion, the world's largest.
China's reserves are more than – $2 trillion, the world's largest.
"Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets," he added.
The comments suggest that China has become the driving force in the gold market and can be counted on to buy whenever there is a price dip, putting a floor under any correction.
Mr Cheng said the Fed's loose monetary policy was stoking an unstable asset boom in China. "If we raise interest rates, we will be flooded with hot money. We have to wait for them. If they raise, we raise.
"Credit in China is too loose. We have a bubble in the housing market and in stocks so we have to be very careful, because this could fall down."
USA Faces Argintine Type Fall: Paper
Where are the economic statesman in our government? We are on the road to ruin and it seems that nobody in government realizes it.-Lou
Barack Obama accused of making 'Depression' mistakes
Barack Obama is committing the same mistakes made by policymakers during the Great Depression, according to a new study endorsed by Nobel laureate James Buchanan.
His policies even have the potential to consign the US to a similar fate as Argentina, which suffered a painful and humiliating slide from first to Third World status last century, the paper says.
There are "troubling similarities" between the US President's actions since taking office and those which in the 1930s sent the US and much of the world spiralling into the worst economic collapse in recorded history, says the new pamphlet, published by the Institute of Economic Affairs.
In particular, the authors, economists Charles Rowley of George Mason University and Nathanael Smith of the Locke Institute, claim that the White House's plans to pour hundreds of billions of dollars of cash into the economy will undermine it in the long run.
They say that by employing deficit spending and increased state intervention President Obama will ultimately hamper the long-term growth potential of the US economy and may risk delaying full economic recovery by several years.
The study represents a challenge to the widely held view that Keynesian fiscal policies helped the US recover from the Depression which started in the early 1930s. The authors say: "[Franklin D Roosevelt's] interventionist policies and draconian tax increases delayed full economic recovery by several years by exacerbating a climate of pessimistic expectations that drove down private capital formation and household consumption to unprecedented lows."
Although the authors support the Federal Reserve's moves to slash interest rates to just above zero and embark on quantitative easing, pumping cash directly into the system, they warn that greater intervention could set the US back further.
Rowley says: "It is also not impossible that the US will experience the kind of economic collapse from first to Third World status experienced by Argentina under the national-socialist governance of Juan Peron."
More...
Barack Obama accused of making 'Depression' mistakes
Barack Obama is committing the same mistakes made by policymakers during the Great Depression, according to a new study endorsed by Nobel laureate James Buchanan.
His policies even have the potential to consign the US to a similar fate as Argentina, which suffered a painful and humiliating slide from first to Third World status last century, the paper says.
There are "troubling similarities" between the US President's actions since taking office and those which in the 1930s sent the US and much of the world spiralling into the worst economic collapse in recorded history, says the new pamphlet, published by the Institute of Economic Affairs.
In particular, the authors, economists Charles Rowley of George Mason University and Nathanael Smith of the Locke Institute, claim that the White House's plans to pour hundreds of billions of dollars of cash into the economy will undermine it in the long run.
They say that by employing deficit spending and increased state intervention President Obama will ultimately hamper the long-term growth potential of the US economy and may risk delaying full economic recovery by several years.
The study represents a challenge to the widely held view that Keynesian fiscal policies helped the US recover from the Depression which started in the early 1930s. The authors say: "[Franklin D Roosevelt's] interventionist policies and draconian tax increases delayed full economic recovery by several years by exacerbating a climate of pessimistic expectations that drove down private capital formation and household consumption to unprecedented lows."
Although the authors support the Federal Reserve's moves to slash interest rates to just above zero and embark on quantitative easing, pumping cash directly into the system, they warn that greater intervention could set the US back further.
Rowley says: "It is also not impossible that the US will experience the kind of economic collapse from first to Third World status experienced by Argentina under the national-socialist governance of Juan Peron."
More...
Sunday, September 6, 2009
Saturday, September 5, 2009
Bank Failure Friday Claims 5 More Banks
Another 5 banks bite the dust, brining year total to 89.-Lou
SAN FRANCISCO (MarketWatch) - Five banks in Missouri, Iowa, Illinois and Arizona were closed by regulators Friday, bringing the number of U.S. bank failures in 2009 to 89 as the effects of the credit crisis continue to ripple through the financial system.
Two suburban Chicago banks failed in Illinois, the Federal Deposit Insurance Corp. said:
InBank, the 14th bank to fail in Illinois this year, had $199 million in deposits as of Aug. 3, the agency said. Chicago-based MB Financial Bank has agreed to assume its deposits. InBank's failure will cost the deposit insurance fund $66 million.
Platinum Bank of Rolling Meadows was closed by the Office of Thrift Supervision, which appointed the FDIC as receiver. As of Aug. 29, the bank had total assets of $345.6 million and deposits of $305 million, the FDIC said. The FDIC authorized payout of insured deposits and estimated the cost to its Deposit Insurance Fund will be $114.3 million. MB Financial Bank will accept the failed bank's direct deposits from the federal government.
Kansas City, Mo.-based First Bank of Kansas City also was closed by regulators. The FDIC said. De Soto, Kan.-based Great American Bank has agreed to assume the failed bank's deposits. First Bank of Kansas City had $16 million in assets and $15 million in deposits as of June 30, the regulator said. Its failure is expected to cost the federal deposit-insurance fund $6 million. First Bank of Kansas City is the second Missouri-based bank to fail this year, the FDIC added.
Sioux City, Iowa-based Vantus Bank and Oak Forest, Ill.-based InBank also were closed. Vantus Bank had roughly $368 million in deposits as of Aug. 28, the FDIC said, and Springfield, Mo.-based Great Southern Bank has agreed to assume the failed bank's deposits. The failure of Vantus Bank will cost the deposit insurance fund $168 million. It's the first bank to fail in Iowa this year, according to the FDIC.
In Arizona, First State Bank in Flagstaff was closed and Sunwest Bank of Tustin, Calif., will assume all of its deposits, the FDIC said. As of July 24, First State had total assets of $105 million and total deposits of about $95 million, the FDIC said. The failure will cost the deposit insurance fund an estimated $47 million, the FDIC said
Friday, September 4, 2009
China Buys $50 Billion of New World Currency
This is the beginning of the dollar losing world reserve status. Perhaps that is why gold is close to $1,000/oz. Make no mistake, this is terrible for the U.S. dollar.-Lou
China Set to Buy $50 Billion in IMF Notes
WASHINGTON -- China is on track to become the first purchaser of notes issued by the International Monetary Fund, a move that would diversify its foreign asset holdings and could give the IMF's quasi-currency more clout.
The IMF on Wednesday said China has signed an agreement to purchase approximately $50 billion in notes from the fund. The notes are denominated in Special Drawing Rights, a quasi-currency issued by the fund and promoted by China as a potential replacement for the dollar as the world's reserve currency.
The agreement is the first of its kind for the fund and marks China's most visible step toward shifting its investment focus away from the U.S. Treasurys market.
"The symbolism is very important here. It is no longer the U.S. dollar alone that the Chinese have access to," said Eswar Prasad, a senior fellow at the Brookings Institution and former head of the IMF's China division.
Countries including Brazil, Russia and India also have expressed interest in purchasing IMF notes, whose issuance is meant to bolster the fund's lending capacity and help fulfill a Group of 20 pledge to strengthen the Fund's own capital position.
Still, "For China this is particularly significant in the context of their strong desire to have an alternative to the dollar for parking their reserves," Mr. Prasad said. "Having a large stock of IMF bonds in circulation that are denominated in SDRs is definitely going to give a boost to the Chinese proposal of increasing the importance of the SDR."
But with a limited market for IMF notes, Eurasia Group Associate Nicholas Consonery doesn't expect the agreement will spur sharp declines in China's purchases of Treasury securities. "At the margin they are trying to make efforts to diversity future asset purchases, but we have no expectation that this, in any immediate sense, will present a real viable alternative for China," he said.
China in June held more than $776 billion worth of U.S. Treasury securities, several times the total amount of notes the IMF is expected to issue. China is the largest foreign holder of U.S. Treasury Securities.
More...
China Set to Buy $50 Billion in IMF Notes
WASHINGTON -- China is on track to become the first purchaser of notes issued by the International Monetary Fund, a move that would diversify its foreign asset holdings and could give the IMF's quasi-currency more clout.
The IMF on Wednesday said China has signed an agreement to purchase approximately $50 billion in notes from the fund. The notes are denominated in Special Drawing Rights, a quasi-currency issued by the fund and promoted by China as a potential replacement for the dollar as the world's reserve currency.
The agreement is the first of its kind for the fund and marks China's most visible step toward shifting its investment focus away from the U.S. Treasurys market.
"The symbolism is very important here. It is no longer the U.S. dollar alone that the Chinese have access to," said Eswar Prasad, a senior fellow at the Brookings Institution and former head of the IMF's China division.
Countries including Brazil, Russia and India also have expressed interest in purchasing IMF notes, whose issuance is meant to bolster the fund's lending capacity and help fulfill a Group of 20 pledge to strengthen the Fund's own capital position.
Still, "For China this is particularly significant in the context of their strong desire to have an alternative to the dollar for parking their reserves," Mr. Prasad said. "Having a large stock of IMF bonds in circulation that are denominated in SDRs is definitely going to give a boost to the Chinese proposal of increasing the importance of the SDR."
But with a limited market for IMF notes, Eurasia Group Associate Nicholas Consonery doesn't expect the agreement will spur sharp declines in China's purchases of Treasury securities. "At the margin they are trying to make efforts to diversity future asset purchases, but we have no expectation that this, in any immediate sense, will present a real viable alternative for China," he said.
China in June held more than $776 billion worth of U.S. Treasury securities, several times the total amount of notes the IMF is expected to issue. China is the largest foreign holder of U.S. Treasury Securities.
More...
Unemployment Rate Hits 7.7%
While non-farm payrolls report shows that "only" 216,000 were lost in August, the unemployment rate rose to a 26 year high of 9.7%. If we take into account "discouraged" workers the unemployment rate is over 17%.
Please someone explain to me how we can have an average of 560,000 filing first time claims for unemployment each WEEK and only lose 216,000 jobs for the month. I have never been able to figure that one out. The only way that works if there were 2,024,000 new jobs created to offset the ones lost.
Ok now let's take a look at the Birth/Death model of phantom jobs created by new businesses. How does the BLS know this? They just think so, that's all.
Hmmm let's take a look shall we?
15,000 new jobs in construction, yea right
26,000 professional services
24,000 leisure and hospitality
A total of 118,000 jobs were created by new business according to the BLS. Some say that BLS stands for Bureau of Labor Statistics, I think it stands for bullshit.-Lou
U.S. unemployment rate jumps to 26-year high of 9.7%
Nonfarm payrolls fall 216,000 in August, 20th consecutive monthly decline
WASHINGTON (MarketWatch) -- The U.S. unemployment rate jumped to a 26-year high of 9.7% in August as nonfarm payrolls fell by 216,000, the 20th consecutive monthly decline, the Labor Department estimated Friday.
U.S. payrolls have dropped by 6.9 million to a total of 131.2 million since the recession began in December 2007, the government data showed. Unemployment has increased by 7.4 million during the recession to stand at 14.9 million.
The 216,000 decline in payrolls was close to market expectations of a 233,000 drop, but the unemployment rate rose higher than the 9.5% level expected. The unemployment rate was 9.4% in July.
It was the smallest decline in payrolls since August 2008.
Payroll losses have moderated in most industries in the past two months after severe declines earlier in the year. In the past three months, payroll losses have averaged 318,000 per month, compared with 491,000 in the previous three-month period.
Payrolls declined an upwardly revised 276,000 in July. In June and July, payroll losses were revised up by 49,000.
Details of the August report were generally weak, however.
More...
Please someone explain to me how we can have an average of 560,000 filing first time claims for unemployment each WEEK and only lose 216,000 jobs for the month. I have never been able to figure that one out. The only way that works if there were 2,024,000 new jobs created to offset the ones lost.
Ok now let's take a look at the Birth/Death model of phantom jobs created by new businesses. How does the BLS know this? They just think so, that's all.
Hmmm let's take a look shall we?
15,000 new jobs in construction, yea right
26,000 professional services
24,000 leisure and hospitality
A total of 118,000 jobs were created by new business according to the BLS. Some say that BLS stands for Bureau of Labor Statistics, I think it stands for bullshit.-Lou
U.S. unemployment rate jumps to 26-year high of 9.7%
Nonfarm payrolls fall 216,000 in August, 20th consecutive monthly decline
WASHINGTON (MarketWatch) -- The U.S. unemployment rate jumped to a 26-year high of 9.7% in August as nonfarm payrolls fell by 216,000, the 20th consecutive monthly decline, the Labor Department estimated Friday.
U.S. payrolls have dropped by 6.9 million to a total of 131.2 million since the recession began in December 2007, the government data showed. Unemployment has increased by 7.4 million during the recession to stand at 14.9 million.
The 216,000 decline in payrolls was close to market expectations of a 233,000 drop, but the unemployment rate rose higher than the 9.5% level expected. The unemployment rate was 9.4% in July.
It was the smallest decline in payrolls since August 2008.
Payroll losses have moderated in most industries in the past two months after severe declines earlier in the year. In the past three months, payroll losses have averaged 318,000 per month, compared with 491,000 in the previous three-month period.
Payrolls declined an upwardly revised 276,000 in July. In June and July, payroll losses were revised up by 49,000.
Details of the August report were generally weak, however.
More...
New Website Launched
In anticipation of the publication of my first book "The Financial Physician: How To Cure Your Money Problems and Boost Your Financial Health" (December 2009) I have redesigned the homepage of this website. I will be changing the blog design as well (today or tomorrow).
Make sure you link to this blog via the homepage. This link will no longer bring you to the current blog postings.
Link to the new site now and when we switch over later today you will have the proper link.
Make sure to click on the "members" (will be activated shortly) and register. This free member's section will have special postings, newsletters and excerpts from my book. The introduction from the book will be the first thing available for members only.
Make sure you link to this blog via the homepage. This link will no longer bring you to the current blog postings.
Link to the new site now and when we switch over later today you will have the proper link.
Make sure to click on the "members" (will be activated shortly) and register. This free member's section will have special postings, newsletters and excerpts from my book. The introduction from the book will be the first thing available for members only.
You can pre-order the book at Amazon for only $10.19 (I'm almost giving them away at that price)
You can reach me with comments questions and suggestions at my new email lou@thefinancialphysician.com .
All national radio shows will be available in the "Lou TV-Radio Show " box. Also Watch my TV pilot there, we are meeting with a number of networks next week in Los Angeles and hope to make a series of it.
These are exciting times, thanks for sharing them with me. Let me know what you think of the new website.
Here is the new website link :
www.thefinancialphysician.com
Bookmark it and send it to your contact list. Now more than ever it is important to stay informed about what is really happening in the financial world.
Thanks for visting and thanks for your support.
Lou
You can reach me with comments questions and suggestions at my new email lou@thefinancialphysician.com .
All national radio shows will be available in the "Lou TV-Radio Show " box. Also Watch my TV pilot there, we are meeting with a number of networks next week in Los Angeles and hope to make a series of it.
These are exciting times, thanks for sharing them with me. Let me know what you think of the new website.
Here is the new website link :
www.thefinancialphysician.com
Bookmark it and send it to your contact list. Now more than ever it is important to stay informed about what is really happening in the financial world.
Thanks for visting and thanks for your support.
Lou
Thursday, September 3, 2009
One Scary Article
Welcome to the new police state. Read this entire article, it will give you chills.-Lou
POLICE STATE, USACops jump on swine-flu power: Shots heard 'round the world
Pandemic bill allows health authorities to enter homes, detain without warrant
A "pandemic response bill" currently making its way through the Massachusetts state legislature would allow authorities to forcefully quarantine citizens in the event of a health emergency, compel health providers to vaccinate citizens, authorize forceful entry into private dwellings and destruction of citizen property and impose fines on citizens for noncompliance.
If citizens refuse to comply with isolation or quarantine orders in the event of a health emergency, they may be imprisoned for up to 30 days and fined $1,000 per day that the violation continues.
Massachusetts' pandemic response bill
"Pandemic Response Bill" 2028 was passed by the Massachusetts state Senate on April 28 and is now awaiting approval in the House.
As stated in the bill, upon declaration by the governor that an emergency exists that is considered detrimental to public health or upon declaration of a state of emergency, a local public health authority, with approval of the commissioner, may exercise the following authorities (emphasis added):
* to require the owner or occupier of premises to permit entry into and investigation of the premises;
*to close, direct, and compel the evacuation of, or to decontaminate or cause to be decontaminated any building or facility, and to allow the reopening of the building or facility when the danger has ended;
*to decontaminate or cause to be decontaminated, or to destroy any material;
to restrict or prohibit assemblages of persons;
*to require a health care facility to provide services or the use of its facility, or to transfer the management and supervision of the health care facility to the department or to a local public health authority;
*to control ingress to and egress from any stricken or threatened public area, and the movement of persons and materials within the area;
*to adopt and enforce measures to provide for the safe disposal of infectious waste and human remains, provided that religious, cultural, family, and individual beliefs of the deceased person shall be followed to the extent possible when disposing of human remains, whenever that may be done without endangering the public health;
*to procure, take immediate possession from any source, store, or distribute any anti-toxins, serums, vaccines, immunizing agents, antibiotics, and other pharmaceutical agents or medical supplies located within the commonwealth as may be necessary to respond to the emergency;
*to require in-state health care providers to assist in the performance of vaccination, treatment, examination, or testing of any individual as a condition of licensure, authorization, or the ability to continue to function as a health care provider in the commonwealth;
*to waive the commonwealth's licensing requirements for health care professionals with a valid license from another state in the United States or whose professional training would otherwise qualify them for an appropriate professional license in the commonwealth;
*to allow for the dispensing of controlled substance by appropriate personnel consistent with federal statutes as necessary for the prevention or treatment of illness;
*to authorize the chief medical examiner to appoint and prescribe the duties of such emergency assistant medical examiners as may be required for the proper performance of the duties of office;
*to collect specimens and perform tests on any animal, living or deceased;
State and local agencies responding to the public health emergency would be required to exercise their powers over transportation routes, communication devices, carriers, public utilities, fuels, food, clothing and shelter, according to the legislation.......
........... to treat individuals exposed to or infected with disease, provided that treatment must not be such as is reasonably likely to lead to serious harm to the affected individual. An individual who is unable or unwilling to submit to vaccination or treatment shall not be required to submit to such procedures but may be isolated or quarantined … if his or her refusal poses a serious danger to public health or results in uncertainty whether he or she has been exposed to or is infected with a disease or condition that poses a serious danger to public health, as determined by the commissioner, or a local public health authority operating within its jurisdiction. (emphasis added)
MORE....
POLICE STATE, USACops jump on swine-flu power: Shots heard 'round the world
Pandemic bill allows health authorities to enter homes, detain without warrant
A "pandemic response bill" currently making its way through the Massachusetts state legislature would allow authorities to forcefully quarantine citizens in the event of a health emergency, compel health providers to vaccinate citizens, authorize forceful entry into private dwellings and destruction of citizen property and impose fines on citizens for noncompliance.
If citizens refuse to comply with isolation or quarantine orders in the event of a health emergency, they may be imprisoned for up to 30 days and fined $1,000 per day that the violation continues.
Massachusetts' pandemic response bill
"Pandemic Response Bill" 2028 was passed by the Massachusetts state Senate on April 28 and is now awaiting approval in the House.
As stated in the bill, upon declaration by the governor that an emergency exists that is considered detrimental to public health or upon declaration of a state of emergency, a local public health authority, with approval of the commissioner, may exercise the following authorities (emphasis added):
* to require the owner or occupier of premises to permit entry into and investigation of the premises;
*to close, direct, and compel the evacuation of, or to decontaminate or cause to be decontaminated any building or facility, and to allow the reopening of the building or facility when the danger has ended;
*to decontaminate or cause to be decontaminated, or to destroy any material;
to restrict or prohibit assemblages of persons;
*to require a health care facility to provide services or the use of its facility, or to transfer the management and supervision of the health care facility to the department or to a local public health authority;
*to control ingress to and egress from any stricken or threatened public area, and the movement of persons and materials within the area;
*to adopt and enforce measures to provide for the safe disposal of infectious waste and human remains, provided that religious, cultural, family, and individual beliefs of the deceased person shall be followed to the extent possible when disposing of human remains, whenever that may be done without endangering the public health;
*to procure, take immediate possession from any source, store, or distribute any anti-toxins, serums, vaccines, immunizing agents, antibiotics, and other pharmaceutical agents or medical supplies located within the commonwealth as may be necessary to respond to the emergency;
*to require in-state health care providers to assist in the performance of vaccination, treatment, examination, or testing of any individual as a condition of licensure, authorization, or the ability to continue to function as a health care provider in the commonwealth;
*to waive the commonwealth's licensing requirements for health care professionals with a valid license from another state in the United States or whose professional training would otherwise qualify them for an appropriate professional license in the commonwealth;
*to allow for the dispensing of controlled substance by appropriate personnel consistent with federal statutes as necessary for the prevention or treatment of illness;
*to authorize the chief medical examiner to appoint and prescribe the duties of such emergency assistant medical examiners as may be required for the proper performance of the duties of office;
*to collect specimens and perform tests on any animal, living or deceased;
State and local agencies responding to the public health emergency would be required to exercise their powers over transportation routes, communication devices, carriers, public utilities, fuels, food, clothing and shelter, according to the legislation.......
........... to treat individuals exposed to or infected with disease, provided that treatment must not be such as is reasonably likely to lead to serious harm to the affected individual. An individual who is unable or unwilling to submit to vaccination or treatment shall not be required to submit to such procedures but may be isolated or quarantined … if his or her refusal poses a serious danger to public health or results in uncertainty whether he or she has been exposed to or is infected with a disease or condition that poses a serious danger to public health, as determined by the commissioner, or a local public health authority operating within its jurisdiction. (emphasis added)
MORE....
Gold and Silver Take Off
SILVER
GOLD
click on charts to enlargeMajor breakout in silver and gold last few days. Is the precious metals market forewarning a dollar collapse and inflation tsunami? A close above $1,000 an ounce on gold for three days will bring in much higher prices. -Lou
Bank CEOs Get Rich On Taxpayer Bailouts
Where is the outrage here? These CEOs ran their banks and the country into the ground, the average guy has lost his job and half of his 401 k and taxpayer bailouts inflate bank stocks and executive's stock options make them rich. This is totally immoral. You have just witnessed the biggest heist in world history. Instead of people robbing banks, the banks have robbed the people.-LouTARP CEOs Make More Money Than Almost Everyone Else
Being the CEO of a bank that got bailed out was pretty rewarding before the crisis.
And even after the government rescue, the rewards to the guy at the top only dropped by one-third.
And even after the government rescue, the rewards to the guy at the top only dropped by one-third.
The top five execs at ten of the top 20 TARP banks have enjoyed a combined increase in the value of their stock options of nearly $90 million in the past year, which is better than being the chief exec at an S&P 500 company. (TARP CEOs' comp is 37% higher than that S&P average.) This suggests, however, that the notion that the executives didn't have "skin in the game" is largely mistaken. They had plenty at stake.
The same set of CEOs also had a three-year pay total of $3.2 billion. But that represents a huge drop. They made $1.2 billion in 2006 and 2007, and last year only took in $800 million. So the crisis and bailout crunched their pay totals by about one-third.
From a study by the Institute for Policy Studies:
From 2006 through 2008, the top five executives at the 20 banks that have accepted the most federal bailout dollars since the meltdown averaged $32 million each in personal compensation. One hundred average U.S. workers would have to labor over 1,000 years to make as much as these 100 executives made in three.
Since January 1, 2008, the top 20 financial industry recipients of bailout aid have together laid off more than 160,000 employees. In 2008, the 20 CEOs at these firms each averaged $13.8 million, for a collective total of over a quarter-billion dollars in compensation. These 20 CEOs averaged 85 times more pay than the regulators who direct the SEC and the FDIC.
While the study is interesting, the fact that it includes pre-crisis years and comps set up before the crisis, mitigates some of the impact. It just comes off as the usual "rich getting too rich" complaint. After all, pay did drop by almost one-third at the bailout banks.
Wednesday, September 2, 2009
Let's pray this guy is wrong.-Lou
Russian Professor: Collapse Of America Could Begin In Two Months
Paul Joseph Watson Tuesday, September 1, 2009
Russian Professor Igor Panarin says that events are continuing to confirm his doomsday prediction first made over 10 years ago, that the United States will completely collapse like the Soviet Union before the end of 2010, and warns that the chaos could begin to unfold in as little as two months.
Panarin, doctor of political sciences and professor of the Russian Diplomatic Academy Ministry of Foreign Affairs, told journalists during the unveiling of his new book yesterday that President Obama has done nothing to forestall the fast approaching crisis and that it could begin to properly unfold in November.
“Obama is “the president of hope”, but in a year there won’t be any hope,” said Panarin. “He’s practically another Gorbachev – he likes to talk but hasn’t really managed to do anything. Gorbachev at least had been a secretary of a regional communist party administration, whereas Obama was just a social worker. His mentality is totally different. He’s a nice person and talks nicely – but he’s not a leader and will take America to a crash. When Americans understand that – it will be like a bomb explosion.”
Since 1998, Panarin has been warning of a future disintegration of the United States and the collapse of the dollar. The recent election victory for Japan’s Democratic Party is another sign that the economic collapse of the U.S. is imminent, according to Panarin.
“Today I received another confirmation that the collapse of the dollar and the US is inevitable. Japan’s Democratic Party won the election, and I’d like to remind you that its leader [Yukio Hatoyama] has the snubbing of the dollar among his economic plans. In plainer words, he plans to transfer Japan’s monetary reserves from US dollars into another currency. The move will seriously accelerate the dollar’s exchange slump as early as this November. Disintegration will follow shortly,” he said, adding that next year China would also begin to massively dump the dollar and that Russia would begin to sell oil and gas for roubles.
Panarin previously stated that the dollar would eventually be replaced with “a common Amero currency as a new monetary unit”, referring to the Security and Prosperity Partnership agreement between the U.S., Canada and Mexico.
He foresees the U.S. breaking up into six different parts, roughly along lines similar to those of 1865 during the Civil War, “The Pacific coast, with its growing Chinese population; the South, with its Hispanics; Texas, where independence movements are on the rise; the Atlantic coast, with its distinct and separate mentality; five of the poorer central states with their large Native American populations; and the northern states, where the influence from Canada is strong,” according to Panarin.
History Repeating Itself?
click on chart to enlarge
I stumbled upon this chart while surfing the web and thought I would share it with you. This is a chart of the Dow Jones Industrials between 1929 and 1933. Look at the rally on left side of chart after the 1929 crash. It was a 46% bounce off the low. People were feeling optimistic that the worst was over and good times were ahead. They were obviously wrong. There were nice bear market rallies along the way but a brutal bear market took hold over the next two years. Will history repeat itself? Unfortunately, I believe so.-Lou
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