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alstry (36.24)

Black Swan Thinking.....

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May 08, 2009 – Comments (11)

The NY Fed hires a member on Goldman's Board despite an OBVIOUS conflict of interest????

Bank stocks skyrocket despite horrible financials and even worse loan default outlook just before they raise BILLIONS from the public in stock offerings????

Recently banks started cutting off lines of credit to millions citizens and businesses across the country while the same are being forced to give those banks TRILLIONS???

Few in the bank controlled mainstream media are objectively reporting the news to the public.....

Are the banks, in conjunction with the Federal Rerserve and Treasury, quietly shutting America down and taking over control of private resources, while they conceal their behavior behind the illusion of a Stock Market Rally by artifically manipulating prices?????

Stay tuned.....Prepare....Don't Fear.

“The democracy will cease to exist when you take away from those who are willing to work and give to those who would not. Thomas Jefferson

“To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical. Thomas Jefferson

'I believe that banking institutions are more dangerous to our liberties than standing armies.  If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.'  Thomas Jefferson

 

 

11 Comments – Post Your Own

#1) On May 08, 2009 at 6:16 PM, alstry (36.24) wrote:

What will you do once you learn IT WAS ONE BIG LIE????

Will you own anything at the time???????

 

The Big Lie: Stress Test Optimism Just Wall St. Propaganda, Former Bank Regulator Says

MUST WATCH VIDEO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

http://finance.yahoo.com/tech-ticker/article/243817/The-Big-Lie-Stress-Test-Optimism-Just-Wall-St.-Propaganda-Former-Bank-Regulator-Says?tickers=BAC,C,JPM,WFS,MS,GS,XLF?sec=topStories&pos=5&asset=&ccode=

 

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#2) On May 08, 2009 at 6:46 PM, alstry (36.24) wrote:

Even Denninger KNOWS its a LIE???

After I posted my Ticker on this subject the Fannie report came out and immediately proved up what I had said - the tests are a sham:

According to The Fed's "More Adverse" scenario prime delinquencies will reach 3-4%.

Well, how about this?

(Click for a larger image)

Note that the PRESENT serious delinquency rate on Fannie's credit book for single family homes is at 3.15%, up from 2.42% last quarter.

What's worse is that a lot of the paper Fannie holds was written before the bubble.  If you look at only the "bubble-era" paper (e.g. ALT-A) or even prime paper written in 05, 06 and 07 the numbers are going to be far worse.

We have the largest lender in the United States reporting current "prime" serious delinquencies, almost all of which will end up as foreclosures, equal to the most serious stress tested level right now and twice the so-called "baseline" scenario.

Furthermore, Fannie's credit-related expenses nearly doubled quarter/over/quarter and was 2/3rds of the full year 2008 expense in one quarter alone!

Folks, there is absolutely nothing to support any claim that these "stress tests" were or are realistic when market performance in the nation's largest lender and one that allegedly has written all "prime" mortgages states (not "suggests") that their credit book delinquency rate has reached the "more adverse" stress level already.

Nowhere in the "mainstream media" (e.g. CNBC, etc) has this been mentioned but it is literally right in your face while reading the Fannie quarterly report.

Everyone is entitled to be optimistic.

But nobody, especially not anyone in the government, has the right to intentionally mislead the markets and investors as to the validity of what they're allegedly doing.

Given the Fannie report, which was known to the government (since it is under conservatorship) for a significant amount of time prior to being filed, there is absolutely no excuse whatsoever for The Fed's "Stress Test" report to be published without a footnote indicating that the "most adverse" metrics had been proved met by the largest prime mortgage lender and guarantor in the United States already.

Investors deserve a government that does not intentionally mislead them.

If you are buying into this rally and the recovery of the banks based on the so-called "Stress Tests", you have been lied to and must consider the "severe" stress scenario as the "baseline", which implies that should the economy deteriorate further the banks will not make it with their alleged "capital cushions."

Period.

This is an outrage; we are no longer just talking about my estimates, Roubini's estimates or even the IMF's estimates.

We are now talking about actual reported financial results.

In short, we have all been had.

Again.

Disclosure: Short Ben Bernanke, The Fed and Treasury

http://market-ticker.denninger.net/archives/1029-More-On-The-SHAM-Stress-Test.html

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#3) On May 08, 2009 at 9:10 PM, alstry (36.24) wrote:

Any Fool who is a player in the debt markets KNOWS that Prime defaults are just getting going.  The Prime market is many times larger than Sub Prime.

May 6 (Bloomberg) -- Chuck Dayton put down a quarter of the $950,000 purchase price when he bought his house in Newport Beach, California, in 2004. He was making $500,000 a year with his drywall company and he expected home values to keep rising.

Then the mortgage market collapsed, new construction stopped and builders no longer needed his services. Dayton, 43, went into default four months ago because he couldn’t afford payments on the three-bedroom home, located within a block of the Pacific Ocean. He hopes his lender will agree to sell the seven-year-old house for less than he owes to avoid a foreclosure.

“It’s just wait and see right now,” Dayton said.

Borrowers such as Dayton, whose 2004 compensation was almost 10 times the median U.S. household income, are becoming trapped by the same issue facing the poorest subprime homeowners: falling home prices erase equity and make it impossible to sell or refinance without losing money.

The number of U.S. homes valued at more than $729,750, the jumbo-loan limit in the most affluent areas, entering the foreclosure process jumped 127 percent during the first 10 weeks of this year from the same period of 2008, data compiled by RealtyTrac Inc. of Irvine, California, show. The rate rose 72 percent for homes valued at less than $417,000 and 78 percent for all homes, RealtyTrac said.

INCOMES ARE EVAPORATING ALL ACROSS AMERICA.....a friend of mine told me a story today about a boat purchased for over half million $$ last year was liquidated for about $200K this week at her marina and the five biggest boats are gone.

This time around, it will be the middle and upper class that feel the brunt of the FU virus......the bankers KNOW this is coming because they are the ones cutting off credit and watching their customers squirm.

My guess is at the end of this mess...the taxpayers will give the banks trillions of dollars and the banks will own millions of homes, luxury yachts, boats, rvs,  shopping centers, hotels, motels, airplanes etc........that once belonged to the taxpayers.

Not a bad gig if you can get it....and some say crime doesn't pay?????....only if you get caught.

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#4) On May 08, 2009 at 10:17 PM, whereaminow (24.34) wrote:

The similarities between the current banking fiasco and story of John Law and the Mississippi Co. in France are eerily similar.  I'm working on a blog about this.

Good work here alstry. One of your best.

(btw, be careful about using that last Jefferson quote. It is not an actual quote of his, but two different quotes that people have spliced together. His distaste for central banking is widely known but that quote is erroneous.)

David in Qatar

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#5) On May 08, 2009 at 11:37 PM, alstry (36.24) wrote:

David,

I see it quoted often...could you please provide the original and the source for it....if possible of course.

Thanks in advance.

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#6) On May 09, 2009 at 12:34 AM, whereaminow (24.34) wrote:

alstry,

The first sentence of the fabricated quote:
"And I sincerely believe, with you, that banking establishments are more dangerous than standing armies ; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."
T.J. to John Taylor, May 28, 1816
(Sentence is highlighted in red here.)

The middle is fabrication, as the term "deflation" was not even coined until the 1920s.  Prices fell steadily from the 18th century until WWII.  Falling prices are the sign of a robust economy and causes an increase in the standard of living of all citizens.

The last sentence could be from this letter:
"Bank paper must be suppressed, and the circulating medium must be restored to the nation to whom it belongs."
T.J. to John W. Eppes, September 11, 1813.
(Again, highlighted in red here.)

similar sentiment:
T.J. to John Wayles Eppes, June 24, 1813
"The States should be applied to, to transfer the right of issuing circulating paper to Congress exclusively, in perpetuum, if possible, but during the war at least, with a saving of charter rights."

Here is the full text of Thomas Jefferson's letters on money,banking, etc.

Hope that helps.

David in Qatar

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#7) On May 09, 2009 at 12:45 AM, motleyanimal (79.87) wrote:

Are the banks, in conjunction with the Federal Rerserve and Treasury, quietly shutting America down and taking over control of private resources, while they conceal their behavior behind the illusion of a Stock Market Rally by artifically manipulating prices?????

Don't you think this is just a bit too far into the camp of nutjobs and conspiracy theories?

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#8) On May 09, 2009 at 1:00 AM, whereaminow (24.34) wrote:

"Every month that we do not have an economic stimulus package, five hundred million Americans lose their job." - Nancy Pelosi

Now that's a nutjob.

David in Qatar

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#9) On May 09, 2009 at 2:38 AM, StopLaughing (< 20) wrote:

No one takes the stress tests seriously. But we now know how much each bank is required to raise at this time. In the future the gov will require the banks to raise more capital but that will be after thier stock prices are much higher.

We all know more defaults are ahead. If the banks need more capital the gov will require them to raise more or it will "give" them more. The GOV in not going to let a big bank fail. They may defacto nationalize one or two by diluting the stock somewhat but the banks are not going to fail. They will just get more capital.

Go ahead and short them if you dare. You are going to get whanged. Sometime the banks will fall again but right now they are running up because thier solvency is settled for a few months and they have the Gov for a back stop later.

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#10) On May 09, 2009 at 8:53 AM, whereaminow (24.34) wrote:

StopLaughing,

I agree that shorting the banks is a horrible idea. You have a better chance of timing the bubble bursting by buying now and keeping an eye out for bad news, scaling out as it comes.  But that's a gamble I don't want to play, so I'm just going to stay on the sidelines and watch until I have a clearer picture.

David in Qatar 

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#11) On May 09, 2009 at 10:37 AM, jddubya (< 20) wrote:

Are the banks, in conjunction with the Federal Rerserve and Treasury, quietly shutting America down and taking over control of private resources, while they conceal their behavior behind the illusion of a Stock Market Rally by artifically manipulating prices?????

I would have thought that Alstrynomics had already foreseen this or could this type of behaviour be the wrench in the gears of all things Alstrynomical!?!?!?!?

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