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Re: I Hate To Say I Told You So, But I Told You So.....

I seriously doubt there is a single member of congress that has not received hundreds of letters on the issue over the years. So their dereliction of duty should be mentioned as well.

Re: I Hate To Say I Told You So, But I Told You So.....

We should all write letters and emails to the editors at the New York Times and force them to acknowlege the Deep Capture article. They can only pretend not to know if we allow them to. Their emails are

ingrassia@nytimes.com
nytnews@nytimes.com
public@nytimes.com
bizday@nytimes.com

I;ll spend five minutes writing them and if five hundred others do the same they cant hide. I'll put this blog on as many chatrooms nad message boards as I know of so the word gets out, too. I'm mad as hell adn I'm not going to take it anymore, isn't that the saying?

Re: I Hate To Say I Told You So, But I Told You So.....

(now that abusive naked short selling is at the center of the world stage educational efforts might play a key role in allowing an appreciation of the heinous nature of this particular form of a “fraud on the market”. Hope this helps.)

THE ROLE OF “SELF-FULFILLING PROPHECIES” IN ABUSIVE NAKED SHORT SELLING (ANSS) ATTACKS

No matter what industry a corporation under an ANSS attack is in one can always recognize the use of “Self-fulfilling prophecies” involved in the modus operandi of the securities fraudsters doing the attacking. From an educational point of view the attacks made on companies involved in the banking sector illustrate this phenomenon quite clearly. The recent debacle in the financial sector serves as an excellent example of the incredible power that these “Self-fulfilling prophecies” can exert.

The foundation for companies in the banking sector is provided by confidence. Why? Because our banking sector is based upon a “fractional reserve” concept wherein a bank is only in possession of about 12% of the money that it has loaned out. If even a minority of depositors were to lose confidence then a “run on the bank” might ensue with disastrous consequences. The initial phase of an abusive naked short selling “bear raid” on a bank or any other corporation for that matter is to get as many “failures to deliver” as possible into the share structure of the targeted company. These “failures to deliver” result in the creation of mere “securities entitlements/IOUs” that predictably depress the share price by artificially manipulating upwards the “supply” of readily sellable legitimate “shares” plus the “supply” of readily sellable “securities entitlements/IOUs”.

After establishing massive naked short positions the usually unregulated hedge funds that use the bank or brokerage firm under attack as their prime broker can merely pull their prime brokerage accounts from the firm. This further exacerbates the confidence issues and soon the ratings agencies are there to mark down the bank’s debt ratings. This forces the bank to increase the amount of cash collateral they pledge to their counterparties; cash that is desperately needed at the time to put out fires elsewhere. All of these developments feed upon each other and the share price is placed into a self-propagating death spiral. The smell of blood in the water attracts other naked short sellers that serves to intensify the death spiral. What started out this cascade of events? It was the refusal of the DTCC to “promptly settle” the trades involved back during the initial naked short selling phase wherein the securities fraudsters absolutely refused to deliver in a timely manner that which they sold. What are the key elements to this self-fulfilling prophecy? The foundation is the 100% predictable claim from the DTCC that they are “powerless” to buy-in the delivery failures of its abusive participants. Add to that an industry based on confidence but supported by a not too confidence inspiring “fractional reserve” system subject to a “run on the bank” especially when the “run on the bank” was pre-planned. The banking sector is the perfect patsy for abusive naked short selling attacks but unfortunately it serves as the foundation for our overall financial sector. In the recent Bear Stearns debacle the failures to deliver shares of Bear Stearns went up 10,800% as their share price went from over $100 to $2. Their trading volume on certain days went from an annual average of 4 million shares to 131 million shares.

These “self-fulfilling prophecies” utilized by abusive naked short sellers also flourish in the nonbanking sector and typically involve yet to be cash flow positive development stage corporations. Once again unfortunately but this is the very sector that serves as the “job growth engine” in the U.S. The modus operandi here is pretty much the same. The initial phases involve relying on the DTCC to claim to be “powerless” to buy-in the delivery failures of its abusive participants. These unaddressed “failures to deliver” result in the creation of mere “securities entitlements/IOUs” that predictably place the share price into a death spiral. The mechanics from here on out differ from that which we see in the banking sector. Knowing that yet to be cash flow positive issuers must constantly go to the markets to sell shares in an effort to pay their monthly “burn rate” the securities fraudsters can force these easily preyed upon companies to raise cash by selling shares at often steep discounts (due to the implied risk of investing in a company whose share price is in a death spiral) to share prices that can easily be placed into a death spiral. If the time period before which these companies can turn the corner to profitability is prolonged then by the time they get there they have so many shares “outstanding” that even if they ever did have earnings they would be diluted into oblivion and the critically important “earnings per share” would be minimal.

What are the critical foundations to these frauds? Once again it is the DTCC and the fact that yet to be cash flow positive issuers must pay their monthly bills. Thus there is a critical period in the development of these “job producing engines” wherein securities fraudsters can tap into these “self-fulfilling prophecies” and predictably shunt the funds of the investors therein into their own pockets in spite of the fact that they continue to absolutely refuse to deliver that which they previously sold. How can that be? At the DTCC the DTCC management only mandates that their abusive participants collateralize these “failures to deliver” on a daily marked to market basis. Thus as the share price predictably plummets the funds of the investors are unconscionably allowed to flow to those that sold fake shares and continue to refuse to deliver that which they sold. Think about it, why would they deliver anything when the DTCC management which by the way are the employees of the abusive DTCC participants says that they don’t have to? Why would Wall Streeters with access to the DTCC ever risk buying low to sell high when they can bypass the need to spend money to buy anything and yet have the right to sell all that they wish to? Oh to have employees empowered to forgive the debts of its bosses!

Re: I Hate To Say I Told You So, But I Told You So.....

bobo,
Yep you were dead on. The casino is rigged. I have been following your blog for a while now. I was somewhat skeptical that the system would crash - now we are teetering. A couple of months back I liquidated my stock positions to all but a few stocks which I am now selling. Your insight has saved my but and I am very grateful.

Re: I Hate To Say I Told You So, But I Told You So.....

Dear New York Times Business Section,

I've been a loyal reader of your newspaper since I was a business school student at the Wharton School at Penn. Also, while living overseas I have always sought out the Herald Tribune because it is derived from your newspaper. However my confidence in your paper has been shaken by your recent biased reporting of the financial melt down and your refusal to treat, in a balanced fashion, the role hedge funds have played in hastening the financial meltdown through naked short selling.

I've personally become acutely aware of the illegal, yet fairly widespread practice of naked short selling because I have worked in the biotechnology industry for 20 years now and have seen my company as well as colleague's companies wilt under the illegal bear attack method of naked short selling. The recent financial history of the biotechnology world is peppered by the unusually acute bear attacks on fledgling, early stage biotech companies by the vary same hedge funds now accused of bringing down Bear Sterns through the vehicle of naked short selling. This practice, combined with a lack of SEC oversight and enforcement of Reg SHO and the re-instituting of the uptick rule have resulted in a toxic mixture of financial wizardry that is bankrupting the biotechnology's fledgling companies; companies that may someday invent important cures for diseases. Yet, the New York Times, through hedge-fund-captured reporters like Joe Nocera has completely failed the biotechnology industry by refusing to even briefly entertain the idea that naked short selling is a problem worthy of a few sentences in your paper. Even in the midst of the greatest financial meltdown since the Great Depression's Crash, the NYT has yet to explain in any comprehensive article, the fact of naked short selling. Even though the SEC Chairman has now come out of the closet and described in detail the nefarious influence of naked short selling on the US financial system, your reporter, Joe Nocera writes a front page article replete with quotes from 'injured' and 'unfortunate' hedge fund managers who bemoan the SEC attempt to regulate naked short selling, and not once does he mention that naked short selling is illegal and is a tool utilized by hedge funds.

Please don't just assume that all of your readership is interested in hearing about the 'injured' and 'unfortunate' hedge fund industry which has now come under stricter SEC oversight. Please take the time to ensure that at least one of your financial reporters at least try to uphold the level of quality, independent minded fair reporting which the world has come to appreciate in the NYT. If I do not read any article in the next few weeks about naked short selling, then I am finished with the NYT and furthermore I will recommend that other colleagues in my industry, many of which understand the pernicious effects of naked short selling, also refrain from reading the NYT.

I look forward to reading your upcoming article describing in detail the fact of naked short selling.

Best Regards,


Jim Doherty Ph.D.

Re: I Hate To Say I Told You So, But I Told You So.....

E.B. I have believed for years now that you have been correct on this issue. You have every right to shout "I TOLD YOU SO." I'm pissed that the media, Wall Street, and the gov't regulators who have been in bed with each other for a long time. Have they no shame? I lost big $$$ (for me) to market manipulation and I'd LOVE to see some of those rich crooks go to jail for a long time. Please keep after them. Go public if necessary but continue doing what you're doing. Thanks.

Re: I Hate To Say I Told You So, But I Told You So.....

I have a Fairy Tale but it does not end well.

There was a mighty Dragon. The mighty Dragon drank oil and used the oil to tourch all of the houses in the land with its mighty, firey breath. The Dragon sucked all of the money out of the banks to feed itself.

There were no Knights mighty enough to sleigh the Dragon. So the Dragon drank all of the oil and tourched all of the houses and sucked all of the money out of the banks.

The problem came when there was no more Oil and no houses left to tourch and all of the money in the banks was gone.

The Dragon without Oil, houses to tourch or money to eat slowly died from starvation.

Interesting footnote: The Myan Calander ends in 2012

Re: I Hate To Say I Told You So, But I Told You So.....

I figured that the big boys would try to take up market share from all the little mortgage lenders, bit by bit. I didn't expect them to raid each other, steal the assets, put them in a fund from which they could pick and choose. Make the taxpayer take the losses, don't even have the expense of doing a securitization. Best of all, HP will convince all that he is a hero. Good video interview of Max Keiser sp? http://www.youtube.com/watch?v=Vhf9KwSUQYw


I didn't occur to me that they were also selling fraudulent bonds until I read about how HUD used assets over and over again to back bonds. Who would ever expect that they weren't the holder of a mortgage if the papers were there. One could check and see if there was actually the property, but wouldn't know that it was also in someone else's portfolio. Now.. there is no way that these duplicate bonds would be recorded on the broker's books as being short. where are they? There should be payments on these bonds. By making the market under perform, each owner wouldn't expect to profit. Sounds like "The Producers". How do you insure that the bonds go down in value and the owners don't expect a return? Drive the value down with an artificial derivative, hedging the short position of the bond. There has to be a way to collect the data and compare properties listed. It might be harder to find if you could get all of this paper in a special place and off one's books. Someone has to service those mortgages and pay the bondholder.

Watching the "lawmakers" sweat this out... and some of them probably took some sizeable losses as the brokers blew up. It is one thing for ordinary people to lose their assets to fraud, but when the special people on Capitol Hill take a hit, and there is suggestion of fraud, they will probably launch a real investigation.

Wonder who GB is going to pardon before January. Weiss, Lerach? Wonder who will be pardoning him?

Bush has a short memory. He is the one who wanted to get everyone in a house. If this is a 300 billion mess, it is costs 1000 per capita. But if oil takes a permanent hike over this, it devalues every asset in America.

Markets ban shorting? Russia complaining about our fiat currency. Maybe we should stay out of Georgia, Get out of Afghanistan and Iraq... but damn... if we aren't in Afghanistan, where will the CIA get the heroine ? Perhaps we should see if we could go long on drugs... cause they will be going up, but one can always buy drugs on the street from the people on government programs... folks that are too disabled to work, requiring pain meds, housing subsidies... food stamps. etc. They have to sell there meds to get the simple things like beer and cigarettes.

Re: I Hate To Say I Told You So, But I Told You So.....

We have been doing this for so long it is almost time for the torch to be passed to those who aren't burnt out or totally cynical.I have watched and heard enough politicians and regulators dole out bullshit for years now and never once recognize that you even exist or answer any of the registered mail delivered to them. Obama should know me by first name and never once did this concerned candidate respond but now he is going to be a possible president. Bullshit. Then there's GW who always asked for every spare penny you had and never once gave a rats ass as to the letters you sent to the White House and him. As we have conversed in the past, the toilet needs to be flushed and a new start all over again. They should all removed from office for they have only collectively screwed us for the sake of their own wealth and their party.

Re: I Hate To Say I Told You So, But...I Told You So.....

Ohio Congresswoman gets it..
http://news.goldseek.com/GoldSeek/1222022373.php

Bobo,

The GOP and the Dems are neither representative of the people. They certainly don't represent me. The GOP appears to be the one supporting big business with the crazy idea that they can forever make new jobs if left to their own devices, yet allow those jobs to be shipped overseas for greater profits. Lovely, and the Dems went along with it.

The Dems and Bush decided that it is the government's responsibility to see that everyone can own a home if the government pays for it. Mama will take care of you... you don't have to do anything but sign up for housing subsidies, food stamps, medicaid, and pump out those kids who also qualify.

Promise the poor anything and take it from everyone else with deficit spending and inflation. Get the vote at any cost, using the incentive of free benefits. Even with inflation, these folks are getting more than they are producing, staying in poverty as the system keeps them there purposefully so that those who run the programs can profit and can use the programs to secure political power. These poor folks are not the slaves, they are simply prisoners of the system. The slaves are the middleclass whose hard earned assets are diminished with every bill that gets passed. Besides their assets being diminished, they are acquiring debt to just survive. Soon it will be economic for them to get on the dole.

We need to build a bridge to nowhere and march 400 people over it. We keep the members of Congress and the Senate who actually have an idea of how screwed up Washington is and let them dismantle the programs. Perhaps the dirty pols could all be sent to Afghanistan and Iraq and dropped off as a fighting unit. Give them unarmored humvees.. and cartons of $60 cokes. We can send in lobbyists as their replacements. Wouldn't want to exclude former Congressman Richard Baker from this honor... Anyone who voted for the war gets to go... anyone who voted for Bush's housing plan gets to go... and the cabinet... the president, vp.

Sending the lobbyists would probably get those legislators who didn't do the right thing while in office and took the high-paying jobs as rewards.

Make Chairman Cox the head of the mission. He can take 2 years to get a concensus as to the direction they will go.. after marching in one direction for a few weeks, the cokes will be gone. Then they can go in the other direction... The bleached bones can be ground up for fertilizer.

Re: I Hate To Say I Told You So, But...I Told You So.....

I would like to see a Law by the SEC that when and if a Company fails that the 'Short Shares would have to be matched with Long Shares. If a Trader did not "Borrow" the shares and has no stock behind their Short they will not get paid.
Their Trade will be reversed.

This would put a very quick HALT to Naked Short Selling currently used to push a Company into Insolvancy.

As it stands now their Naked Short Shares do not have to Cover if there is an Insolvency, a Bankruptch, Delisted, or put onto the Pink Sheets. Plus, they get around paying Taxes on any Gains as it is not a recognized Gain. I wonder how much Revenue the Government loses from this current rule. It is a very Valad reason why Naked Short Sellers want to make sure that the Company goes into Insolvency, declares Bankruptch, is Delisted, or put onto the Pink Sheets.

Really, the answer to this problem is so simple. Require your Broker to notify you if your shares are not delivered T-3 so you would have the option to Cancle the Trade, make long and shorts shares match up when a Company is insolvent, goes into Bankruptcy, is Delisted, or goes on the Pink Sheets. Eliminate the Tax incentive for the Short Sellers, by making them have to pay Gains on the Short Sale even if the Company becomes insolvent, goes into Bankruptcy, is Delisted or goes on the Pink Sheets.

Re: I Hate To Say I Told You So, But...I Told You So.....

Over the weekend, the CBOE threatened to not open and now the discussion of the SEC advisers is to make the OMM exemption permanent.. This is the rule that was only added during regulation SHO. Before that time, it seems that the OMMs were able to function serviing as a market maker between people. If they had a willing buyer and a willing seller, they matched the orders. Then to increase business, they got an exemption.. a loophole to allow them to be counterparties with no risk. What other business is allowed to remove risk by sellling something that belongs to someone else depriving them of the capital.

The "mortgage bailout crisis" is now expanding into all credit where bondholders may also get to include all types of credit to sell to the taxpayer. This could include student loan, car loan and credit card debt. Very interesting that just two years ago, under the lead of Joe Biden, cc debt was excluded from bankruptcy filing.

What is happening is the people are simply borowiing directly from the government as the government, a bankrupt entity is going to be the mortgage holder, note holder.

And the money that is being used to hold these bonds is borrowed and the government has to pay the Fed interest on it.

The people who didn't take out the risky loans and lived within their means are being treated to OPD. Other People's Debt. The conservative and sane people are being held responsible for the excesses of government lack of regulation, Wall Street greed, and consumer ignorance and overspending.

The CBOE is too important to suffer, and this emergency too timely to adjust accounting rules, and shorting too valuable ... for people to take a breather and stop this insanity.

We don't need a bailout. We need some sanity.

Fed approves GS and MS change status to bank holding companies giving them permanent access to emergency $s from the Fed!!!

I believe this is HUGE news!

http://news.yahoo.com/s/ap/20080922/ap_on_bi_ge/bank_change

I expect that GS and MS have huge Naked Short positions and this now gives them the access to the same "bad debt" exchange program other financial institutions have access to. So they can pass along all their illegal stock and get "clean" $s from the Fed. This is plain and simple money laundering. Absolutely UNBELIEVABLE!!!


Ever since the early warnings on the "mortgage crises," I have thought the entire NSS fraud will be covered by an "Emergency" action by the Treasury and Fed working together. This is EXACTLY what is happening. They are using this "self-provoked" "Emergency" to get all the $s they need quickly approved by the US Government and then they will resolve all the NSS counterfieting under the "cover" of the "mortgage crises" as justification.

Mark my words...they will use the "mortgage crises" as cover to get the $700 Billion approved in a hurry and then use it to cover up the NSS criminal activity that has been going on for years.

Absolutely UNBELIEVABLE!!!

----------------------


Fed approves GS and MS change status to bank holding companies giving them permanent access to emergency loans from the Fed!!!



By MARTIN CRUTSINGER, AP Economics Writer 1 hour, 36 minutes ago on Sept 21.



WASHINGTON - The Federal Reserve said Sunday it had granted a request by the country's last two major investment banks — Goldman Sachs and Morgan Stanley — to change their status to bank holding companies.


The Fed announced that it had approved the request of the two investment banks. The change in status will allow them to create commercial banks that will be able to take deposits, bolstering the resources of both institutions.



The change continued the biggest restructuring on Wall Street since the Great Depression.



The request for the change to bank holding companies was granted by a unanimous vote of the Fed's board of governors during a late Sunday meeting in Washington.



The change of status means both companies will come under the direct regulation of the Federal Reserve, which regulates the nation's bank holding companies. The banking subsidiaries of the two institutions will face the stricter regulations that commercial banks are required to meet. Previously, the primary regulator for Goldman and Morgan Stanley was the Securities and Exchange Commission.



Shares of both institutions had come under pressure ever since the bankruptcy filing last week by investment bank Lehman Brothers and the forced sale of investment bank Merrill Lynch to Bank of America.



Investors feared that the last remaining independent investment banks would not be able to survive in their current form. There had been speculation that both institutions would be acquired by commercial banks, whose ability to take deposits would give them a stable source of funding.



The decision by the two giants of finance to get approval from the Fed to change their own status represented another dramatic development in one of the most turbulent periods in Wall Street history.



In the surprise announcement late Sunday, the central bank said that to provide increase funding support to the two institutions during the transition period, they would be allowed to get short-term loans from the Federal Reserve Bank of New York against various types of collateral.



The Fed said its action would take final effect after a five-day waiting period required under law.



The decision means that the Goldman and Morgan Stanley will be able not only to set up commercial bank subsidiaries to take deposits, giving them a major resource base, but they will also have the same access as other commercial banks to the Fed's emergency loan program.



After the collapse of Bear Stearns and its forced sale to JP Morgan Chase last March, the Fed used powers it had been granted during the Great Depression to extend its emergency loans to investment banks as well as commercial banks. However, that extension was granted on a temporary basis.



But as commercial banks, Goldman Sachs and Morgan Stanley will have permanent access to emergency loans from the Fed, the same privilege that other commercial banks enjoy.



The action by the Fed's board of governors in Washington came on a day when the Bush administration continued to campaign for quick congressional approval of its request for authority to use $700 billion to purchase a mountain of bad mortgage debt held by financial companies. The effort represented the boldest action yet aimed at stabilizing chaotic financial markets.



Democrats in Congress said they would demand provisions in the bailout measure to protect people in danger of losing their homes as well as seeking to cap executive compensation at firms who get to unload their bad mortgages debt onto the government. But the proposal was expected to win quick congressional passage because both parties are concerned about the adverse reaction in financial markets should the measure look like it was being delayed.

Re: I Hate To Say I Told You So, But...I Told You So.....

The rule of law is is a contract between the rulers and the ruled.
When the contract is broken the ruled ,the people MUST stand up and demand the contract be abided by or none of the rules of law are in force.
We the people are reduced to chattel no longer protected in our life or property rights.
If the rule of law becomes devided one set for the priviliged and one set for the rest then there IS NO RULE OF LAW.
Amendment 14 section 4 THE DEFINITION OF PUBLIC DEBTS.
The bailouts of all of the private sector banks ,brokerages and morgage companys have been illegal and void.
If the payouts are not declared null and void then this section of the constitution must be.
One or the other .
The rule of law.
America ,We The people, stand up and demand your rights , to own your own property ,to not have your current and future value givin to the people who have already stolen from you.
We must demand the law be equal or we are giving up our rights, all we have fought to earn, clear back to 12th century.
Our leaders need to get the value that was stolen from america back from those who stole it not from the people it was stolen from.
If this is how the freedom in america works then we are all truly slaves.

Fed approves GS and MS change status to bank holding companies giving them permanent access to emergency $s from the Fed!!!

YES, let's not forget that Hank Paulsen is from Goldman Sach's. hummmm.
This article just about sums it up.
http://tpzoo.wordpress.com/2008/09/19/henry-paulson-goldman-sachs-and-the-good-old-buddy-system/

Henry Paulson, Goldman Sachs and the good old buddy system
FDIC Warns 117 Banks On List of Potentially Troubled Banks.
Are You Banking With One? Read On
SovereignSociety.com/Market_Crisis


The bailout plans for Wall Street are the biggest rip off of taxpayers ever. But wait a minute. There was the Savings and Loan crisis from the 1980s and 1990s.That was bad, wasn’t it?

In a nutshell: The Savings and Loans’ interest rates on deposits were regulated since the 1930’s and found themselves up against the competition of money market funds which could pay higher interest. Deregulation led to increasingly risky investment strategies and ultimately 747 Savings and Loans failed, leaving the taxpayer with $ 120 billion bill. The ensueing large budget deficits may have contributed to the recession of the early nineties.

Taking inflation into account the then $ 120 billion would amount to roughly $ 200 billion today. And it helped causing a two year recession.

That was bad really. And today?

Today’s bill stands at.. who knows? Let’s add some up. Bear Stearns bailout:Tens of billions, for the sake of the argument let me be generous and say $ 10 billion. Freddie and Fannie $100 billion each. AIG, as far as we know $ 85 billion. That sums up to almost 300 billion. Given, except for AIG this is just a risk assessment, but nevertheless the figures are impressive. This year budget deficit is $ 410 billion. Add this up. I am getting $ 700 billion. And yesterday’s bailout is not in the equation yet. Some say, the rescue package is worth $ 1 trillion plus.

I may have missed a few bailouts and stuff and maybe Fannie and Freddie won’t use up all the projected costs, but all this doesn’t bode well for your economy. Remember the federal debt already amounts to $9.5 trillion.

But Hank Paulson is an expert, right? Yes he is. Hank Paulson is a former Goldman Sachs executive he is acting without any interference by your elected officials up to now. President Bush has issued a statement amounting to a free pass and don’t expect any resistance from Congress. And they can’t be blamed for that either. The problem is, the failed system is so complex and intricate, only experienced investment banking specialists see through most of it and I venture to say not all of it either. You can only hope and pray the solution presented to you is going to be something else except a blatant bailing out of Paulson’s buddies at your expense.

Question: Would it be better to let Wall Street bite the bullet ? Henry Paulson says no, the financial system must be saved to protect the economy. But I wonder what he really wants to save. The celebratory mood in the financial markets tells me someone must have their interests at heart at least.

Your interests? Hope and pray. The money spent on bailing out the banks won’t build bridges (not even to nowhere) won’t fix antiquated sewer systems, won’t fix roads, won’t pay for education, won’t be there for health insurance, won’t be there for your veterans, won’t be there for your national security, just won’t be there for anything you’ll eventually need.

Paulson's Goldman Sachs shorted CDOs To cash out for billions on the subprime meltdown

This may be old news to many, but given current actions by our "savior" Hank, we need to put him under a microscope and really question his motivations.
If someone is going to be running a Trillion Dollar hedge fund with MY money at stake, I sure as heck want to know his EVERY move...especially since he is proven to move quickly and could turn the tables on us overnight and in one fell-swoop, that'll be all she wrote! "Say good night Dick!"

20-Sep-08 06:32 pm
Paulson's Goldman Sachs shorted CDOs To cash out for billions on the subprime meltdown:

http://www.money-rx.com/blog/2008/01/how-goldman-sachs-beat-subprime-crash.html

"By the end of 2006, the people creating and selling subprime mortgages and other so-called CDOs (collateralized debt obligations), had put Goldman Sachs in exactly the same position as every other Wall Street firm. Enter two smart guys who trade Goldman's proprietary books to argue to the CEO and chief financial officer that the subprime market feels soft and that Goldman should short it. This they do, in such massive quantities that they more than offset the long positions in subprime held throughout the rest of the firm, leaving Goldman short the subprime market and in a position to make billions when it crashes. End of story."

"As Bloomberg's Michael Lewis says, it is highly unusual for a big Wall Street firm to counter it's own CDO holdings with short positions, without in any way intimating their own mortgage department about this, or even their reasons for doing so. True that they were saved from being wiped out, but if they had shared this knowledge with their mortgage department, their clients too would have been protected from the crash."

http://online.wsj.com/article/SB119759714037228585.html?mod=hps_us_whats_news


"The subprime-mortgage crisis has been a financial catastrophe for much of Wall Street. At Goldman Sachs Group Inc., thanks to a tiny group of traders, it has generated one of the biggest windfalls the securities industry has seen in years.

The group's big bet that securities backed by risky home loans would fall in value generated nearly $4 billion of profits during the year ended Nov. 30, according to people familiar with the firm's finances. Those gains erased $1.5 billion to $2 billion of mortgage-related losses elsewhere in the firm."

Re: I Hate To Say I Told You So, But...I Told You So.....

Bobo - You did indeed "tell us so" and you were 100% correct. Now - I understand this is from the proposed legislatioin to bail out the financial industry:
---------------
"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agnecy discretion, and may not be reviewed by any court of law or any administrative agency."
---------------------------
Is it being proposed that one NON-elected official be given absolute authority over the entire finanial industry of the United States ? No congressional oversight, no judicial review, no restraints, no recourse ? If so, that is not democracy, that is dictatorship. If this is true, how can we fight it ?

Re: I Hate To Say I Told You So, But...I Told You So.....

Short Ban. Well that lasted for a day. Exempted Market Makers, Specialists, Option Writers. Only people that cannot short are Retail investors.

I think this was really a Fraud on the investing public when they announced this Rule knowing the would completely Gut it as soon as it was announced.

They did not even require a pre borrow before shorting.

This was just a ruse to get Retail Investors to buy into the Bank stocks thinking they would go up and then gave EVERYONE on Wall Street an exception to short.

This is a Fraud in my opinion as they did not BAN Short Selling like they announced. They Banned it and then 1 day later exempted EVERYONE from the Ban.

Especially hard to swallow when your Government lies and mis leads you.

Re: I Hate To Say I Told You So, But...I Told You So.....

http://publikationen.ub.uni-frankfurt.de/volltexte/2007/4885/pdf/ILF_WP_068.pdf

Re: I Hate To Say I Told You So, But...I Told You So.....

As far as I can tell, Cede & Co. is a private partnership dating back at least until 1971 when Senator Metcalf attempted to find out who was behind this nominee who controlled companies like Time Magazine.

Cede & Co. (either CEntral DEpository or "cede" = to give up ownership) is the actual registered owner of ALL shares in electronic street form. They own them and all you have is a contractual claim against their ownership. Have fun if they go bankrupt.

Why is it so hard to find out:

- who owns cede
- why it is a private partnership instead of a trust or non profit corporation
- where it is domiciled

From my last link:

Because it meant placing the bulk of the economy's securities in the
possession and name of a body owned by the financial market participants, and then trading claims
against the accounts of such body, it required amendment of commercial law – i.e., Article 8 UCC –
rather than corporate law, amendments that BASIC promised to procure.120 It should be noted,
however, that even BASIC saw the indirect holding system as a "temporary" measure on the way to
what was somewhat futuristically called the "certificateless society". 121 As the SEC Report
summarizes:
The many points of difficulty in the delivery and transfer process manifestly call for
attack on various fronts: the expansion of facilities, the removal of artificial stumbling
blocks; the modernization of those processes through the improvement of clearance
procedures, the immobilization of the certificate through the advancement of the
development of depositories, such as the NYSE Central Certificate Service, the
development of machine readable certificates, and, hopefully, the ultimate achievement of
a certificateless society.122

Re: I Hate To Say I Told You So, But...I Told You So.....

The idea of a decentralized network of registers on which shares would be transparently
transferred appears to have been considered less and less realistic just as progress in technology made
it a more and more possible. Probably the most significant reason for the market forgetting it,
however, was that immobilization was imposed by law. Congress, in the 1975 Securities Acts
Amendments, took the extremely unusual step of legally imposing a single technique for settlement on
the markets. The effect on securities settlement was somewhat comparable the effects of a law that
would require all computers plugged into the internet to run on DOS. As amended, § 17A Exchange
Act requires the SEC to "use its authority . . . to end the physical movement of securities certificates in
connection with the settlement among brokers and dealers of transactions in securities . . .",123 i.e., to
impose the immobilization of securities certificates in a depository. In this way, what was considered
118 SEC, UNSAFE PRACTICES STUDY, supra note 54, at 194.
119 See Id. at 194 et seq.
120 See Id. at 188.
121 See Id. at 186.
122 Id. at 168, 203 ("... the ultimate objectives of the certificateless society and the standardization of
documents used in the clearing, settlement and delivery process").
123 15 U.S.C. § 78q-1(e) (2000).
Draft of September 18, 2007. © David C. Donald
II. THE CREATION OF THE "INDIRECT HOLDING SYSTEM" 18
an "interim step" on the way to the "certificateless society" became the permanent basis of U.S.
securities settlement. Given the SEC's role as an independent regulatory agency expert in the
technicalities of the securities market, the choice of Congress to regulate down into the details and
impose a system that was generally considered a short-term, second-best solution is curious.

Re: I Hate To Say I Told You So, But...I Told You So.....

You're not a shareholder if you're not Cede and Co.

The whole issue of naked shorting goes away if the intermediary is the company transfer agent and the shares are electronically registered as owned by the actual shareholder. DTCC could even run the computers to keep track of it all.

The only losers would be the intermediaries that fractionally back your ownership with real shares.

If politicians wanted to fix things over night, they would turn stock brokers into companies that broker transactions for a fee and let purchasers of the shares actually own them by registering that ownership on the company shareholder list (blacking it out as anonymous as necessary, but still OWNING the shares).

Simple solutions are not achieved because of vested interest that is bringing down the whole country.

In 1983 the SEC
amended Rules 14a-13 and 14b-1 to give issuers a right to ask brokers to provide them with a list of
those client-shareholders who did not objected to their identities being disclosed to the issuer ("Non-
Objecting Beneficial Owners," or "NOBOS").171 This would seem to have solved much of the
communications problem except for the significant catch that the NOBO list may be used solely for
the limited purpose of sending the annual report or "voluntary" communications,172 but not the proxy
materials, which still must be distributed indirectly through the intermediaries, although nothing but
cost would prevent an issuer from sending an identical second copy of proxy materials directly to the
names on the list.173 The late Professor Louis Loss and Dean Joel Seligman rightly criticize this
limitation as a missed opportunity to support direct communications.174 Perhaps what holds the SEC
back from allowing direct dispatch of proxy cards is that the recipients (beneficial shareholders) would
in any case not be shareholders under corporate law, and thus could not cast votes without receiving a
proxy from the registered shareholder – the intermediary.

Re: I Hate To Say I Told You So, But...I Told You So.....

Cede & Co. doesn't have to vote the way you direct them. They OWN the shares and take your directions under advisement depending on how many more shares there are than IOU's.

In case you missed it, good read and a document to download to your hard drive before the DTCC scours it off the internet.

http://publikationen.ub.uni-frankfurt.de/volltexte/2007/4885/pdf/ILF_WP_068.pdf


In the 2003 annual meeting of Unilever plc, the high number intermediaries participating
in distributing the information on the meeting and casting shareholder votes led to a significant
number of the votes not being recorded, i.e., being lost.215 Evidence presented to the Department of
Trade and Industry showed that in connection with the Unilever annual meeting records indicated that
the 10 largest institutional investors had apparently cast less than 50 % of their votes. Unilever
contacted these investors and inquired why they chose not to vote, but the investors' records showed
that relevant intermediaries never received the voting instructions of three of the investors.216 Myners
found that the major problem affecting the exercise of voting rights was the "large number of
participants through whom information and votes must pass," which is a result of how the securities
custody and settlement system is set up.

Re: I Hate To Say I Told You So, But...I Told You So.....

http://publikationen.ub.uni-frankfurt.de/volltexte/2007/4885/pdf/ILF_WP_068.pdf

The answer from the side of the intermediaries has of course not been to take themselves out of
the picture by creating the kind of direct relationship between issuers and shareholders that was
preferred but not feasible in 1971, but rather to increase their own services by offering "information
scrubbing". Oxera reports in 2004 that intermediaries employ up to 40 persons for the sole purpose of
"scrubbing" information to reduce errors and increase accuracy.229 The more sources and types of
information that are forced through an intermediary, however, the greater the challenge for scrubbing.
Imagine if the nodes and switches of the internet spine did not simply direct and deliver the emails
sent in the United States on a given day, but copied them, passed them through a filter that recorded
them, and then placed them in a different format before passing them on to the recipient. This image
can begin to give us an idea of the herculean task that DTCC has to perform. As DTCC stated in its
2006 annual report, its "corporate action experts provide 'round-the-clock support, in 16 languages"
and in 2006 "provided 'scrubbed' information on about 900,000 events from 160 countries."230

Re: I Hate To Say I Told You So, But...I Told You So.....

In order to make the posting of materials more efficient, the next logical step would be to
change over to bearer shares, so the corporate law logic of registered shareholders would no longer
collide with the efficiency of the indirect holding system. However, the lobbying for this move would
bring us back to the problem faced in 1971 as dematerialization was suggested as a way to preserve
direct communication. At that time, all 50 states required that certificated shares at least be available
to shareholders upon request, and a changeover was considered prohibitive. Today, all states still
provide only for registered shares (as opposed to bearer shares)239 and allow the company to treat the
registered shareholder as the person entitled to exercise the rights from the shares. Yet it appears that
the indirect holding system has become so deeply entrenched that the SEC is more willing to move
toward a type of shares wholly foreign to the United States than to allow direct, electronic links to
send securities settlement information to transfer agents on a real time basis, which – as will be
discussed in Part IV – would reinstate stockholder lists to their pre-1970's state of information.

Re: I Hate To Say I Told You So, But...I Told You So.....

Sorry for so many posts, but I think this document is important.

Here's the punch line for those hoping that the SEC would save the day and don't understand the SEC needs to be dismantled.

However, issuers remain distant from the actual operation of
the market's trading and settlement systems, and should be able to look to the SEC to promote their
interests in the SRO rulemaking process. To date, however, it appears that the SEC has remained
unaware of any conflict of interest between issuers and intermediaries.

http://publikationen.ub.uni-frankfurt.de/volltexte/2007/4885/pdf/ILF_WP_068.pdf

Historically, exchanges have been membership organizations, and for a membership
organization the answer is straightforward: The broker-dealer intermediaries, who are
their members, are their primary customers. With a membership organization, the other
two constituents (investors and the listed companies) are important primarily because
they are critical for the profitability of the members. Nevertheless, the bottom line is, with
a membership organization, the interests of the intermediaries come first.359

last one, I promise

Broker-dealers obtain a number of advantages from the indirect holding system, although it is
difficult to estimate their value. First among the benefits is likely to be customer loyalty.360 Like a
garage that stores its customer's winter tires during the warmer seasons, a broker that has its customer's
shares knows he will return, if only with a request to close his account. This means that the broker
always has its customer's current address, and can contact him to offer its services and potential
transactions. It also means that the broker will always have a last chance to keep its customer from
changing brokers, a last opportunity to make a special offer and win back a customer. The advantage
of this position is certainly obvious when compared to one in which shareholders could contact any
broker based on price and reputation to make a sale of shares held with the issuer in a register/account.

Cox to Testify - Senate Banking Committee

Christopher Cox is scheduled to Testify this week in front of the Senate Banking Committee to push the 700 Billion dollar get out of jail free program. I am very interested in his testimony as many of you probably are. What I am hoping is that they publicly acknowledge the systemic failure of the Securties Market was the SEC own failure to enforce FTD and Counterfitting due to NSS. Do you think he will be the patsy - or do you think he is going to avoid the subject?

http://money.cnn.com/2008/09/23/news/economy/bailout_hearing/index.htm?cnn=yes

Cox: Default Swaps are Naked Shorts

In prepared testimony that he will deliver to the Senate this morning, the SEC chairman will call for Congress to give his agency authority over swaps.
Tim Reason - CFO.com | US
September 23, 2008


Credit default swaps, potentially the next domino to fall in the ongoing financial crisis, are the debt equivalent of naked shorts on stocks, according to the chairman of the Securities and Exchange Commission.

In prepared testimony that he will deliver before the Senate Banking Committee this morning, SEC chairman Christopher Cox equated the sale of the unregulated bond derivatives with naked short selling and called on Congress to give his agency authority to regulate the derivatives.

"Economically, a CDS buyer is tantamount to a short seller of the bond underlying the CDS," said Cox. "Whereas a person who owns a bond profits when its issuer is in a position to repay the bond, a short seller profits when, among other things, the bond goes into default. Importantly, CDS buyers do not have to own the bond or other debt instrument upon which a CDS contract is based. This means CDS buyers can 'naked short' the debt of companies without restriction."

Equating credit default swaps on corporate bonds with short selling of corporate stocks will resonate on Capitol Hill, where short selling, particularly naked short selling, has come under fire for purportedly driving down the stocks of financial institutions and undermining public confidence. The SEC has a partial ban in place on naked short selling and also temporarily limited short selling of 799 financial stocks in response to the financial crisis.

Credit default swaps — the unregulated derivatives that are supposed to offer their buyers a payout if the company against which they're written defaults or goes bankrupt — were, until recently, hailed by many as a valuable financial innovation. In fact, the notional value of credit-default swaps soared to some $62.2 trillion in 2007 from $34.4 trillion in 2006, according to the International Swaps and Derivatives Association.

But the bankruptcy of Lehman Brothers, a major issuer of credit default swaps, combined with the government takeover of AIG, which had covered more than $440 billion in bonds with credit default swaps, has raised serious concerns about the default of the default swaps themselves.

The Financial Accounting Standards Board voted last month to push forward with a disclosure requirement aimed at helping investors get a better read on the financial instruments, rejecting recommendations by its own staff and many in the financial industry that the provision be delayed. Under the rule every derivative — or group of similar derivatives — the seller must disclose the nature of the instrument (term, reasons for entering into the contract, and current status of the payment/performance risk); the maximum potential amount of future payments the seller is required to make under the contract terms; the fair value of the derivative; and the nature of any recourse provisions that would allow the seller to recover the amount it pays out — such as collateral pledged or assets held by third parties that the seller has the right to liquidate.

The new rule will be effective for fiscal years ending after November 15, 2008. That means that investors may have a much clearer picture of the credit default swap market by February of next year, when calendar-year companies begin releasing their year-end results. But that may not be soon enough.

Indeed, during the August meeting in which FASB voted to issue the new disclosure rule, board member Thomas Linsmeier was adamant about acting sooner rather than later. "In this market, with the credit crisis, two or three months may be a big deal" in terms of investor disclosures, he said.

Re: I Hate To Say I Told You So, But...I Told You So.....

Bobo - I need to understand this. Are not we supposed to have a store of gold in reserve in Ft. Knox as a form of "Government Savings" to address just such times as this economic melt down where the government is asked to step in with a bail out ? I suppose that there is no gold in Ft. Knox and suspect that the Federal Reserve Bank has received that a long time ago in the form of payment for loans to the government. Am I just completly off base here.

Re: I Hate To Say I Told You So, But...I Told You So.....

Hank has to have sole authority to raise the price of the bonds. He isn't going to be evaluating them, he is price fixing so that the multiple puts (CDS) out there will be reduced in value. By raising the price of the bonds, he is going to eliminate the insurance obligation of those who are on the hook. Trouble is... if the put sellers have these on their books legitimately, they are already bankrupt. So where are the real books? It looks like the FBI is checking that out.

Every dollar he raises the bonds, likely $30 or so in insurance obligations melt away.

Yes, the bond market is underpriced.. There was some toxic waste out there, but it isn't that bad.. It is the insurance that is toxic and this has to be cleaned up before the FBI accountant arrives and spills the beans that the insurance contracts are not being accounted for. If they were being properly marked, these guys would all be bankrupt. There isn't enough money to pay off the contracts and there sure isn't enough to pay the RICO fines.

Re: I Hate To Say I Told You So, But...I Told You So.....

Everyone reading we are getting way off track here so let me put this in its proper prospective..

This is a zero sum game here, somebody wins (or steals in this case) and some body loses (or is a victim of theft and fraud) now why are'nt our regulatory agencies going after the people that made the real money in this debacle. Therein lies the rub. They can't go after themselves, "THEY ARE THE ONES THAT STOLE IT" Folks were are looking the wrong way on a one way street and getting ready to cross. You know what happens then don't you? Now they want our money to repair their greedy habit and they get to keep their "Ill gotten gains" I think not and so should you. GET THE MONEY BACK FIRST!! Then jail the criminals and finally determine what is needed to fix the system. End of story!!

Re: I Hate To Say I Told You So, But...I Told You So.....

http://www.huffingtonpost.com/howard-a-rodman/keith-richards-cockroache_b_128760.html

(1) Goldman Sachs gives Hank Paulson seven hundred million dollars (that's seven zero zero comma zero zero zero comma zero zero zero) in salary and bonuses.

(2) Goldman Sachs lends Hank Paulson to the Treasury (now that he can afford to be a public servant).

(3) As the Secretary of the Treasury, Paulson insists that we give Goldman Sachs a lot of money, in exchange for a lot of crap. (If not, we all die.)

(4) Except it's not Hank Paulson's money, it's ours.

(5) If the crap turns out to be crap, we're stuck with it. (And by the way: if it's not crap, why are they so desperate to unload it?)

(6) In four months, Paulson returns to Goldman Sachs.

(7) Paulson receives salary and bonuses from the money we just gave to Paulson to give to Goldman Sachs to give to Paulson.

(8) It's our money. Or was. But we don't get preferred shares. We don't get a ten percent dividend. We don't even get a free copy of The Warren Buffet Way: Second Edition (Paperback). We get crap.

Re: I Hate To Say I Told You So, But...I Told You So.....

The bailout

http://www.youtube.com/watch?v=S27yitK32ds

Re: I Hate To Say I Told You So, But...I Told You So.....

Listening to Ben Bernanke this morning with his " I regret having to tell you all of this bad news"... was nauseating to say the least. They did not just get an ephipany last week that lead them down this road. Despite the fact that the author of the youtube piece added his own ending... I found this speech before the House by Rep. Kapture from the 9th district of Ohio to be spot on!

http://www.youtube.com/watch?v=S27yitK32ds

re-quoted here by Robert Reich....The "fat cats on Wall Street who have raked in zillions for years, now extorting in effect $2,000 to $5,000 from every American family to make up for their own nonfeasance, malfeasance, greed, and just plain stupidity"

But...... "it just didn't exist"... "it's just the wild wild west" "we just wanted to see our stock prices go up"......

Those who have been negligent need to be removed, investigated, jailed in most cases, and as the Rep. stated... everything they took needs to be disgorged and sent back to the people. THEN....... let's sit down and figure out how much THEY still need to pay to "bail out" THEIR mess! They stole..they need to repay!

http://underthelobsterscope.blogspot.com/2008/09/robert-reich-has-best-recommendation.h

2 Former Bear Stearns Executives Arrested...MORE TO COME!!!

2 Former Bear Stearns Executives Arrested

http://uk.youtube.com/watch?v=LCsVKayewgk

Re: I Hate To Say I Told You So, But...I Told You So.....

Almost a year ago, I was telling my friends that the naked shorts would somehow get wrapped up and "covered-up" under the "sub-prime mortgage crises"...and here we are..."Hank" is demanding immediate action to get a hold of $700 Billion bankroll with no strings attached and no oversight so he can "personally" resolve "the problem". The "'bad debt' swap for 'good credit'" plan is a masterful "Plan A" for Hank and Ben. (I expect they have a Plan B too…and C and D…)

With the Treasury and Fed working together putting the squeeze on Bush and his administration, we can expect BIG things to happen. In my opinion, Bush had some knowledge and was demanding a way to preserve his legacy, but with is legacy now fully planted in the "toasty oats" category, drastic measures are being taken to try to appear that he is actually trying to save us from certain financial death when actually, this is a political maneuver.

These plans are being challenged right now by both Democrats and Republicans AND the American people. But, debate is almost over and I believe the deal is almost done and will be wrapped up (pushed through) quickly.

You have to enjoy following the action on the "political" front too...it is all related...as the Republicans are trying to milk this crises for all it's got...and may actually be part of "The Plan"...in my opinion...

As you may have heard, McCain is being reported as coming to the "rescue"...after speaking to Bush yesterday, he announced he was stopping his campaign, asking that the debate be delayed and flying to DC. In response, Obama said he would *not* go to DC, despite the known grave circumstances for the American people, and said he felt the debates should go on. What a political numbnuts he is. After that, McCain called Bush and then Bush called Obama and said he needed to come to an emergency meeting Bush was calling, so only then did Obama book his flight to DC. I think the Republicans are orchestrating this situation as best they can to try to trip up Obama. I believe it may work. It will give Obama yet another opportunity to vote "Present" again. LOL.

But, anyway, back to the point...here's my take. I have a very strong sense that the cat is out of the bag and the word is spreading like wildfire within DC leadership about the unbelievable GRAND scale of the naked shorts IOUs) in the market (the so called next "tsunami" and I believe someone (DoJ) has clearly defined that NSS would actually be considered a form of "counterfeiting" ,"fraud" ...and, if it were to be revealed to the general public, it would be the death-nail in the coffin for all involved from top to bottom and from left to right. Game over! Good night sweet Charlotte. Book me a flight for the Caymans!

Who was it, Confucius, that said, "It always gets darker before it goes completely black!"

DoJ is definitely seen moving into the financial houses with the arrests at Bear Sterns yesterday. But just you wait and see, when the DoJ starts arresting members of the SEC and the DTCC, now THAT will get people really worried. I predict that these arrests will escalate in the coming weeks as the DoJ tried to gather its evidence. Unfortunately, I expect these things will move more slowly that many would like but they are gathering evidence as they go along and will work their way up to the TOP of the heap.

I do smell a STING, but if I am reading the tea leaves right, and such a huge collapse is "allowed" to occur, there won't be any money to pay off those who lost due to the NSS that has been done and everyone would get nothing zip zero zilch NADA. Essentially, bankruptcy clears the books, doesn't it?

So these are my thoughts.

Pete

Re: I Hate To Say I Told You So, But...I Told You So.....

Bobo - I want to be perfectly clear here. I have a major problem with being FORCED to bail out the very crooks that stole my life savings invested in NFI via Naked Short Selling, Media bashing and other proven fraudulous means. The only thing I ever wanted from Congress was enforcement of a guaranteed level , honest playing field. I never got that. What I got instead was a rigged game where the officials were crooked. So I lost my savings. That was my bad decision for not getting out soon enough and having faith in the system that at least ONE honest man would be found to effect honest change. Didn't happen so now Congress assures that the crooks get to be bailed out for the crimes they committed and I get to eat shit while my elected officials sit on their ass and help force me to have to pay even more. I really really do not like it. At this point I don't give a crap if the economy folds. Maybe that is what it will take to finally get the lazy American public to wake up and kick these bums out. My life experience tells me that is not going to happen. Paulsen will to hire the very "financial Industry Professionals" who screwed us in the first place to run this F*&^*ing bailout. AHHHHHHHH I am so pissed

Re: I Hate To Say I Told You So, But...I Told You So.....

bbhindyou - I totally agree with everything you have written. Stand up and be heard. Kick the bums out etc. However, the problem I am having is that no person I have written to (and there have been many) that are in a position to do ANYTHING about it, is willing to do anything about it. They just will not do it. Take as an example the Senate Banking Committee meeting. I watched the entire thing. I can not name one Senator that thought the "bailout" as written was a good thing. Menendez spoke particurlarly plainly. The lady from Ohio that Mary gave the link to said it out loud. Many stated basically what you have said. Now, today, we hear "we have found a solution". When you look at the solution, you find that it is nothing more or less than what was proposed in the first place. Let the American public pay the crooks for taking their money. There is nothing there about making Wall Street pay for anything. There is nothing there about the taxpayer getting any of the potential up side. Indeed Paulson says he is going to hire "Financial Industry Professionals" to oversee the payout. Guess who that is going to be. No you don't need to guess as you already know its going to be the very crooks that stole the money in the first place. Paulson doesn't have to worry if it won't work, he will be history after the first of the year anyway and the chairman of the Fed gets to still sit there with a smug, condesending look on his face promising to do "the right thing" undefined. I don't trust these crooks one bit. Not one bit. My friend we are going to take another screwing and there is nothing we will be able to do about it. Nothing. "The solution" that our "best money can buy" congressmen and women have in hand is well.......... I wouldn't want to have that solution in my hand !! We need to practice bending over cause we are going to get another screwing.

Re: I Hate To Say I Told You So, But...I Told You So.....

The securities naked shorts are huge, but the bond naked shorts are larger. This has to be addressed. Eliminating the mark to market accounting would do the equivalent of the bailout making the CDS liability much less. That still doesn't address the poor quality of the bonds or the multiple CDS liabilities or the potential of the bonds having been counterfeited. Basically,we don't know how much junk is in the market and how many counterfeit bonds are in the market.

The unregulated derivatives market has parties in it who bought insurance they didn't deserve. It was simply a way to drive the bonds down and profit enormously from it. The derivative liabilities were not accounted for properly. The CDS holders want to be paid off. If the writers of the CDS go bk, they are not going to get paid. If the bonds recover, the holders won't get paid as much as they expected. This is a race between the Treasury (Paulson) and the FBI. The Treasury wants to get the bonds up in price before the FBI recognizes that the sellers have not been accounting for their liabilities.

The prices could be readjusted up with an accounting change and accomplish similar results as the bailout. So why is Paulson opposed to this? The accounting costs would be similar for both.

I conclude that this is to allow Wall Street the opportunity to get the cash and put it in hard assets. They will be secure as the bailout is inflationary and makes the ultimate value of the bonds less. The Fed needs to increase interest rates to get things back in line. Unfortunately, the economy will not take that well.

"Cox: Default Swaps Are Naked Shorts
In prepared testimony that he will deliver to the Senate this morning, the SEC chairman will call for Congress to give his agency authority over swaps.
Tim Reason - CFO.com | US
September 23, 2008

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Credit default swaps, potentially the next domino to fall in the ongoing financial crisis, are the debt equivalent of naked shorts on stocks, according to the chairman of the Securities and Exchange Commission.

In prepared testimony that he will deliver before the Senate Banking Committee this morning, SEC chairman Christopher Cox equated the sale of the unregulated bond derivatives with naked short selling and called on Congress to give his agency authority to regulate the derivatives.

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"Economically, a CDS buyer is tantamount to a short seller of the bond underlying the CDS," said Cox. "Whereas a person who owns a bond profits when its issuer is in a position to repay the bond, a short seller profits when, among other things, the bond goes into default. Importantly, CDS buyers do not have to own the bond or other debt instrument upon which a CDS contract is based. This means CDS buyers can 'naked short' the debt of companies without restriction."

Equating credit default swaps on corporate bonds with short selling of corporate stocks will resonate on Capitol Hill, where short selling, particularly naked short selling, has come under fire for purportedly driving down the stocks of financial institutions and undermining public confidence. The SEC has a partial ban in place on naked short selling and also temporarily limited short selling of 799 financial stocks in response to the financial crisis.

Credit default swaps — the unregulated derivatives that are supposed to offer their buyers a payout if the company against which they're written defaults or goes bankrupt — were, until recently, hailed by many as a valuable financial innovation. In fact, the notional value of credit-default swaps soared to some $62.2 trillion in 2007 from $34.4 trillion in 2006, according to the International Swaps and Derivatives Association.

But the bankruptcy of Lehman Brothers, a major issuer of credit default swaps, combined with the government takeover of AIG, which had covered more than $440 billion in bonds with credit default swaps, has raised serious concerns about the default of the default swaps themselves.

The Financial Accounting Standards Board voted last month to push forward with a disclosure requirement aimed at helping investors get a better read on the financial instruments, rejecting recommendations by its own staff and many in the financial industry that the provision be delayed. Under the rule every derivative — or group of similar derivatives — the seller must disclose the nature of the instrument (term, reasons for entering into the contract, and current status of the payment/performance risk); the maximum potential amount of future payments the seller is required to make under the contract terms; the fair value of the derivative; and the nature of any recourse provisions that would allow the seller to recover the amount it pays out — such as collateral pledged or assets held by third parties that the seller has the right to liquidate.

The new rule will be effective for fiscal years ending after November 15, 2008. That means that investors may have a much clearer picture of the credit default swap market by February of next year, when calendar-year companies begin releasing their year-end results. But that may not be soon enough.

Indeed, during the August meeting in which FASB voted to issue the new disclosure rule, board member Thomas Linsmeier was adamant about acting sooner rather than later. "In this market, with the credit crisis, two or three months may be a big deal" in terms of investor disclosures, he said. "

Re: I Hate To Say I Told You So, But...I Told You So.....

One of the talking heads suggested that the market will punish people until this bailout goes through. So the big players are betting on this going through. When the plan hit roadblocks last night with the House Republicans, the Congressmen acknowledged that they get elected by the people.

First Capitol Hill played to the poor and the mortgage industry to balloon the industry and get unqualified people in debt they couldn't afford. Now they are playing to the shareholders and bondholders of FNM and FRE who expected to be insured against what was terrible malfeasance. Those of us who didn't own stock or bonds from FRE and FNM shouldn't have to cover the losses. There is no end to whom Capitol Hill will kowtow.. It has to stop now.

Re: I Hate To Say I Told You So, But...I Told You So.....

To who it may concern...
Dear reader , the plan being pushed now to bail out the market mess is in fact the big throw all of the american taxpayers under the bus at once move.
If you are one of the powerful people being asked to help force this onto america { I know you read this blog] please consider this ,the seat on the bus they are offering you for your participation in this is in the back.
The people who are in charge of this mess are not stupid and realize the bus trip may be a long one so they are provisioning the back of the bus with things to be used in case of emergency ,YOU.
Think the old twilight zone series, the How to serve man episode.
Think long and hard.
The life you might save by standing up and Not selling out america may be your own.

Re: I Hate To Say I Told You So, But...I Told You So.....

This whole debacle is the last straw by the worst president in the history of our country.The dying gasp of a lame duck president giving his rich friends a parting gift...700 large ones with no one to answer to..not the courts...not anybody....what a fucken joke................

Re: I Hate To Say I Told You So, But...I Told You So.....

What's the story with phantom shares this week? Did the SEC require a pre-borrow and a hard T+3 delivery, on a temporary basis? Did they remove the market maker exception? I saw Bobo say the revised over the weekend but I must have missed it.

Re: I Hate To Say I Told You So, But...I Told You So.....

At last!!!!

DTCC gets subpoena


Official: Cuomo expands short selling probe
By MICHAEL GORMLEY, Associated Press Writer 13 minutes ago

New York Attorney General Andrew Cuomo is broadening his investigation of short selling on Wall Street, according to a senior official in his office.

Cuomo is turning to the massive credit-default swap market, which he believes may have been manipulated in order to give the impression that certain companies were in trouble.

The official said Friday that Cuomo has subpoenaed information from providers of market data in what could be a huge probe into one of the factors contributing to volatility in the stock and credit markets. The official spoke on the condition of anonymity because the investigation hasn't been announced.

Cuomo believes the swap contracts may have been abused by short-sellers who spread negative rumors as a way to drive down a company's share price.

Credit default swaps protect an investor in the event a company defaults on their debt. Their price is a measure of a company's soundness, so a higher price for the swap should be a signal of trouble with a company's financial standing.

Cuomo suspects short sellers used credit default contracts to make a company's position appear worse than it actually was. That could help short-sellers profit from a decline in a company's shares.

In a short sale, an investor borrows shares of a company, usually from their broker, and then immediately sells them at their market price. If the share price subsequently falls, the investor buys back the shares at the lower price and pockets the difference.

The federal government blamed massive short selling by hedge funds for contributing to the collapses of Lehman Brothers Holdings Inc., American International Group Inc. and other troubled companies.

Big drops in share prices can be particularly damaging to financial companies by making them appear weak to lenders, clients and other participants in financial markets, as well as making it harder for them to raise capital when they need it. The Security and Exchange Commission's temporary ban on short-selling gave a number of companies time to stabilize.

The subpoenas this week went to trading information companies Markit Group Ltd., Depository Trust & Clearing Corp. and Bloomberg LP.

Markit Vice President John Dooley declined comment Friday.

Spokesmen for Depository Trust & Clearing Crop. and Bloomberg didn't immediately respond to requests for comment on Friday.

The senior official said Cuomo is looking at data on the transactions over the last several weeks involving American International Group Inc., Merrill Lynch & Co., Morgan Stanley, Goldman Sachs Group and Washington Mutual Inc.

Cuomo's other Wall Street investigations include his probe this year into complaints about short sellers of stock and whether they engaged in a conspiracy or spread rumors and bad information to influence the stock prices of Lehman Brothers Holdings Inc., American International Group Inc., Goldman Sachs Group Inc., Morgan Stanley and other firms that have been hammered in the ongoing financial crisis.

http://news.yahoo.com/s/ap/20080926/ap_on_bi_ge/cuomo_short_selling;_ylt=At2PqewhgWVX_VC4FS8RDlSs0NUE

Re: I Hate To Say I Told You So, But...I Told You So.....

(Ot)
The bond and derivative markets have also been rife with failures for years. The OCC took action to stop the mess in bonds a couple years ago.
The next huge one is the real estate market. Options and futures on geographically specific property came to life almost a year ago.
Seems the smart money needed a hedge for their investments with the knowledge of what has come to berar.
Smart land owners, which the taxpayers will soon be, should utilize these vehicles to protect ourseves...hwh

Re: I Hate To Say I Told You So, But...I Told You So.....

Goldman.. anyone??

Conflict of interest for Goldman?

Big story coming in the Sunday NY Times (hmmm). Check out the info that the head of Goldman Sachs was in meetings with bankers, regulators and Paulson when they agreed to dole out $85B to A.I.G. since Goldman was heavily exposed to AIG losses.

But rest assured. The Goldman head, Lloyd Blankfein, wasn't there for the benefit of his firm. He was there to look out for the good of the nation. He said so. So trust him.

How long until our coins are changed to "In Goldman We Trust."




September 28, 2008
Behind Biggest Insurer’s Crisis, a Blind Eye to a Web of Risk
By GRETCHEN MORGENSON
“It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions.”

— Joseph J. Cassano, a former A.I.G. executive, August 2007



Two weeks ago, the nation’s most powerful regulators and bankers huddled in the Lower Manhattan fortress that is the Federal Reserve Bank of New York, desperately trying to stave off disaster.

As the group, led by Treasury Secretary Henry M. Paulson Jr., pondered the collapse of one of America’s oldest investment banks, Lehman Brothers, a more dangerous threat emerged: American International Group, the world’s largest insurer, was teetering. A.I.G. needed billions of dollars to right itself and had suddenly begged for help.

The only Wall Street chief executive participating in the meeting was Lloyd C. Blankfein of Goldman Sachs, Mr. Paulson’s former firm. Mr. Blankfein had particular reason for concern.

Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said.

Days later, federal officials, who had let Lehman die and initially balked at tossing a lifeline to A.I.G., ended up bailing out the insurer for $85 billion.

Their message was simple: Lehman was expendable. But if A.I.G. unspooled, so could some of the mightiest enterprises in the world.

A Goldman spokesman said in an interview that the firm was never imperiled by A.I.G.’s troubles and that Mr. Blankfein participated in the Fed discussions to safeguard the entire financial system, not his firm’s own interests.

Yet an exploration of A.I.G.’s demise and its relationships with firms like Goldman offers important insights into the mystifying, virally connected — and astonishingly fragile — financial world that began to implode in recent weeks.

Although America’s housing collapse is often cited as having caused the crisis, the system was vulnerable because of intricate financial contracts known as credit derivatives, which insure debt holders against default. They are fashioned privately and beyond the ken of regulators — sometimes even beyond the understanding of executives peddling them.

Originally intended to diminish risk and spread prosperity, these inventions instead magnified the impact of bad mortgages like the ones that felled Bear Stearns and Lehman and now threaten the entire economy.

http://www.nytimes.com/2008/09/28/business/28melt.html?_r=1&pagewanted=all

ELIMINATE EX-CLEARING

how about that for an idea?

Re: I Hate To Say I Told You So, But...I Told You So.....

Bobo - I found this of some interest.
-----------------
Today is the decision day," said Barney Frank, D-Mass., on the House floor. "If we defeat this bill today, it will be a very bad day for the financial sector of the American economy and the people who will feel the pain are not the top bankers and top corporate executives but average Americans."
-------------------------------
Now let me see if I have this right. No matter what is done on the "bailout", the top bankers and top corporate exec's won't take a hit for all the fraud but the American public will. HA HA HA HA HA HA . He went on to say that there was a mountain of private money out there just poised to jump in as soon as a bill was signed. Excuse me, the "mountain" of money sure isn't in the hands of the American public but in the hands of the top bankers and corporate exec's that stole it from the public. Its in the hands of the big boy hedge fund players. So if they have so much money let them bail themselves out. Thats what I'm saying. I also go along with John Boehner who said that it was going along however reluctantly up until Polosi, Frank and Dodd had to open their mouths and make it a strictly partisan issue. Let them all rot in hell. Thats what I'm saying. Gee, maybe I should be a little clearer on how I feel about this. Not.