Monday, July 8, 2013
Is it Protecting the American people or is it just Marketing
You have all hear about Prism so nothing in new. I have developed the question, "Is it Protection of Marketing" based upon the following articles:
By the way, a huge thanks to Bruce S. for the links...
http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?ref=charlesduhigg
http://gigaom.com/2013/06/19/now-anyone-can-buy-the-nsas-database-tech/
All credit to the authors and contributors to these articles...
Enjoy...
Thursday, September 16, 2010
Blackwater, where are you?????
Jeremy Scahill makes sure we do not forget what we are up against with is company...
Thanks, Jeremy...
Blackwater's Black Ops
Jeremy Scahill | September 15, 2010
Published on The Nation
Over the past several years, entities closely linked to the private security firm Blackwater have provided intelligence, training and security services to US and foreign governments as well as several multinational corporations, including Monsanto, Chevron, the Walt Disney Company, Royal Caribbean Cruise Lines and banking giants Deutsche Bank and Barclays, according to documents obtained by The Nation. Blackwater's work for corporations and government agencies was contracted using two companies owned by Blackwater's owner and founder, Erik Prince: Total Intelligence Solutions and the Terrorism Research Center (TRC). Prince is listed as the chairman of both companies in internal company documents, which show how the web of companies functions as a highly coordinated operation. Officials from Total Intelligence, TRC and Blackwater (which now calls itself Xe Services) did not respond to numerous requests for comment for this article.
One of the most incendiary details in the documents is that Blackwater, through Total Intelligence, sought to become the "intel arm" of Monsanto, offering to provide operatives to infiltrate activist groups organizing against the multinational biotech firm.
Governmental recipients of intelligence services and counterterrorism training from Prince's companies include the Kingdom of Jordan, the Canadian military and the Netherlands police, as well as several US military bases, including Fort Bragg, home of the elite Joint Special Operations Command (JSOC), and Fort Huachuca, where military interrogators are trained, according to the documents. In addition, Blackwater worked through the companies for the Defense Intelligence Agency, the Defense Threat Reduction Agency and the US European Command.
On September 3 the New York Times reported that Blackwater had "created a web of more than 30 shell companies or subsidiaries in part to obtain millions of dollars in American government contracts after the security company came under intense criticism for reckless conduct in Iraq." The documents obtained by The Nation reveal previously unreported details of several such companies and open a rare window into the sensitive intelligence and security operations Blackwater performs for a range of powerful corporations and government agencies. The new evidence also sheds light on the key roles of several former top CIA officials who went on to work for Blackwater.
The coordinator of Blackwater's covert CIA business, former CIA paramilitary officer Enrique "Ric" Prado, set up a global network of foreign operatives, offering their "deniability" as a "big plus" for potential Blackwater customers, according to company documents. The CIA has long used proxy forces to carry out extralegal actions or to shield US government involvement in unsavory operations from scrutiny. In some cases, these "deniable" foreign forces don't even know who they are working for. Prado and Prince built up a network of such foreigners while Blackwater was at the center of the CIA's assassination program, beginning in 2004. They trained special missions units at one of Prince's properties in Virginia with the intent of hunting terrorism suspects globally, often working with foreign operatives. A former senior CIA official said the benefit of using Blackwater's foreign operatives in CIA operations was that "you wouldn't want to have American fingerprints on it."
While the network was originally established for use in CIA operations, documents show that Prado viewed it as potentially valuable to other government agencies. In an e-mail in October 2007 with the subject line "Possible Opportunity in DEA—Read and Delete," Prado wrote to a Total Intelligence executive with a pitch for the Drug Enforcement Administration. That executive was an eighteen-year DEA veteran with extensive government connections who had recently joined the firm. Prado explained that Blackwater had developed "a rapidly growing, worldwide network of folks that can do everything from surveillance to ground truth to disruption operations." He added, "These are all foreign nationals (except for a few cases where US persons are the conduit but no longer 'play' on the street), so deniability is built in and should be a big plus."
The executive wrote back and suggested there "may be an interest" in those services. The executive suggested that "one of the best places to start may be the Special Operations Division, (SOD) which is located in Chantilly, VA," telling Prado the name of the special agent in charge. The SOD is a secretive joint command within the Justice Department, run by the DEA. It serves as the command-and-control center for some of the most sensitive counternarcotics and law enforcement operations conducted by federal forces. The executive also told Prado that US attachés in Mexico; Bogotá, Colombia; and Bangkok, Thailand, would potentially be interested in Prado's network. Whether this network was activated, and for what customers, cannot be confirmed. A former Blackwater employee who worked on the company's CIA program declined to comment on Prado's work for the company, citing its classified status.
In November 2007 officials from Prince's companies developed a pricing structure for security and intelligence services for private companies and wealthy individuals. One official wrote that Prado had the capacity to "develop infrastructures" and "conduct ground-truth and security activities." According to the pricing chart, potential customers could hire Prado and other Blackwater officials to operate in the United States and globally: in Latin America, North Africa, francophone countries, the Middle East, Europe, China, Russia, Japan, and Central and Southeast Asia. A four-man team headed by Prado for countersurveillance in the United States cost $33,600 weekly, while "safehouses" could be established for $250,000, plus operational costs. Identical services were offered globally. For $5,000 a day, clients could hire Prado or former senior CIA officials Cofer Black and Robert Richer for "representation" to national "decision-makers." Before joining Blackwater, Black, a twenty-eight-year CIA veteran, ran the agency's counterterrorism center, while Richer was the agency's deputy director of operations. (Neither Black nor Richer currently works for the company.)
As Blackwater became embroiled in controversy following the Nisour Square massacre, Prado set up his own company, Constellation Consulting Group (CCG), apparently taking some of Blackwater's covert CIA work with him, though he maintained close ties to his former employer. In an e-mail to a Total Intelligence executive in February 2008, Prado wrote that he "recently had major success in developing capabilities in Mali [Africa] that are of extreme interest to our major sponsor and which will soon launch a substantial effort via my small shop." He requested Total Intelligence's help in analyzing the "North Mali/Niger terrorist problem."
In October 2009 Blackwater executives faced a crisis when they could not account for their government-issued Secure Telephone Unit, which is used by the CIA, the National Security Agency and other military and intelligence services for secure communications. A flurry of e-mails were sent around as personnel from various Blackwater entities tried to locate the device. One former Blackwater official wrote that because he had left the company it was "not really my problem," while another declared, "I have no 'dog in this fight.'" Eventually, Prado stepped in, e-mailing the Blackwater officials to "pass my number" to the "OGA POC," meaning the Other Government Agency (parlance for CIA) Point of Contact.
What relationship Prado's CCG has with the CIA is not known. An early version of his company's website boasted that "CCG professionals have already conducted operations on five continents, and have proven their ability to meet the most demanding client needs" and that the company has the "ability to manage highly-classified contracts." CCG, the site said, "is uniquely positioned to deliver services that no other company can, and can deliver results in the most remote areas with little or no outside support." Among the services advertised were "Intelligence and Counter-Intelligence (human and electronic), Unconventional Military Operations, Counterdrug Operations, Aviation Services, Competitive Intelligence, Denied Area Access...and Paramilitary Training."
The Nation has previously reported on Blackwater's work for the CIA and JSOC in Pakistan. New documents reveal a history of activity relating to Pakistan by Blackwater. Former Pakistani Prime Minister Benazir Bhutto worked with the company when she returned to Pakistan to campaign for the 2008 elections, according to the documents. In October 2007, when media reports emerged that Bhutto had hired "American security," senior Blackwater official Robert Richer wrote to company executives, "We need to watch this carefully from a number of angles. If our name surfaces, the Pakistani press reaction will be very important. How that plays through the Muslim world will also need tracking." Richer wrote that "we should be prepared to [sic] a communique from an affiliate of Al-Qaida if our name surfaces (BW). That will impact the security profile." Clearly a word is missing in the e-mail or there is a typo that leaves unclear what Richer meant when he mentioned the Al Qaeda communiqué. Bhutto was assassinated two months later. Blackwater officials subsequently scheduled a meeting with her family representatives in Washington, in January 2008.
Through Total Intelligence and the Terrorism Research Center, Blackwater also did business with a range of multinational corporations. According to internal Total Intelligence communications, biotech giant Monsanto—the world's largest supplier of genetically modified seeds—hired the firm in 2008–09. The relationship between the two companies appears to have been solidified in January 2008 when Total Intelligence chair Cofer Black traveled to Zurich to meet with Kevin Wilson, Monsanto's security manager for global issues.
After the meeting in Zurich, Black sent an e-mail to other Blackwater executives, including to Prince and Prado at their Blackwater e-mail addresses. Black wrote that Wilson "understands that we can span collection from internet, to reach out, to boots on the ground on legit basis protecting the Monsanto [brand] name.... Ahead of the curve info and insight/heads up is what he is looking for." Black added that Total Intelligence "would develop into acting as intel arm of Monsanto." Black also noted that Monsanto was concerned about animal rights activists and that they discussed how Blackwater "could have our person(s) actually join [activist] group(s) legally." Black wrote that initial payments to Total Intelligence would be paid out of Monsanto's "generous protection budget" but would eventually become a line item in the company's annual budget. He estimated the potential payments to Total Intelligence at between $100,000 and $500,000. According to documents, Monsanto paid Total Intelligence $127,000 in 2008 and $105,000 in 2009.
Reached by telephone and asked about the meeting with Black in Zurich, Monsanto's Wilson initially said, "I'm not going to discuss it with you." In a subsequent e-mail to The Nation, Wilson confirmed he met Black in Zurich and that Monsanto hired Total Intelligence in 2008 and worked with the company until early 2010. He denied that he and Black discussed infiltrating animal rights groups, stating "there was no such discussion." He claimed that Total Intelligence only provided Monsanto "with reports about the activities of groups or individuals that could pose a risk to company personnel or operations around the world which were developed by monitoring local media reports and other publicly available information. The subject matter ranged from information regarding terrorist incidents in Asia or kidnappings in Central America to scanning the content of activist blogs and websites." Wilson asserted that Black told him Total Intelligence was "a completely separate entity from Blackwater."
Monsanto was hardly the only powerful corporation to enlist the services of Blackwater's constellation of companies. The Walt Disney Company hired Total Intelligence and TRC to do a "threat assessment" for potential film shoot locations in Morocco, with former CIA officials Black and Richer reaching out to their former Moroccan intel counterparts for information. The job provided a "good chance to impress Disney," one company executive wrote. How impressed Disney was is not clear; in 2009 the company paid Total Intelligence just $24,000.
Total Intelligence and TRC also provided intelligence assessments on China to Deutsche Bank. "The Chinese technical counterintelligence threat is one of the highest in the world," a TRC analyst wrote, adding, "Many four and five star hotel rooms and restaurants are live-monitored with both audio and video" by Chinese intelligence. He also said that computers, PDAs and other electronic devices left unattended in hotel rooms could be cloned. Cellphones using the Chinese networks, the analyst wrote, could have their microphones remotely activated, meaning they could operate as permanent listening devices. He concluded that Deutsche Bank reps should "bring no electronic equipment into China." Warning of the use of female Chinese agents, the analyst wrote, "If you don't have women coming onto you all the time at home, then you should be suspicious if they start coming onto you when you arrive in China." For these and other services, the bank paid Total Intelligence $70,000 in 2009.
TRC also did background checks on Libyan and Saudi businessmen for British banking giant Barclays. In February 2008 a TRC executive e-mailed Prado and Richer revealing that Barclays asked TRC and Total Intelligence for background research on the top executives from the Saudi Binladin Group (SBG) and their potential "associations/connections with the Royal family and connections with Osama bin Ladin." In his report, Richer wrote that SBG's chair, Bakr Mohammed bin Laden, "is well and favorably known to both arab and western intelligence service[s]" for cooperating in the hunt for Osama bin Laden. Another SBG executive, Sheikh Saleh bin Laden, is described by Richer as "a very savvy businessman" who is "committed to operating with full transparency to Saudi's security services" and is considered "the most vehement within the extended BL family in terms of criticizing UBL's actions and beliefs."
In August Blackwater and the State Department reached a $42 million settlement for hundreds of violations of US export control regulations. Among the violations cited was the unauthorized export of technical data to the Canadian military. Meanwhile, Blackwater's dealings with Jordanian officials are the subject of a federal criminal prosecution of five former top Blackwater executives. The Jordanian government paid Total Intelligence more than $1.6 million in 2009.
Some of the training Blackwater provided to Canadian military forces was in Blackwater/TRC's "Mirror Image" course, where trainees live as a mock Al Qaeda cell in an effort to understand the mindset and culture of insurgents. Company literature describes it as "a classroom and field training program designed to simulate terrorist recruitment, training, techniques and operational tactics." Documents show that in March 2009 Blackwater/TRC spent $6,500 purchasing local tribal clothing in Afghanistan as well as assorted "propaganda materials—posters, Pakistan Urdu maps, etc." for Mirror Image, and another $9,500 on similar materials this past January in Pakistan and Afghanistan.
According to internal documents, in 2009 alone the Canadian military paid Blackwater more than $1.6 million through TRC. A Canadian military official praised the program in a letter to the center, saying it provided "unique and valid cultural awareness and mission specific deployment training for our soldiers in Afghanistan," adding that it was "a very effective and operationally current training program that is beneficial to our mission."
This past summer Erik Prince put Blackwater up for sale and moved to Abu Dhabi, United Arab Emirates. But he doesn't seem to be leaving the shadowy world of security and intelligence. He says he moved to Abu Dhabi because of its "great proximity to potential opportunities across the entire Middle East, and great logistics," adding that it has "a friendly business climate, low to no taxes, free trade and no out of control trial lawyers or labor unions. It's pro-business and opportunity." It also has no extradition treaty with the United States.
Thanks, Jeremy...
Blackwater's Black Ops
Jeremy Scahill | September 15, 2010
Published on The Nation
Over the past several years, entities closely linked to the private security firm Blackwater have provided intelligence, training and security services to US and foreign governments as well as several multinational corporations, including Monsanto, Chevron, the Walt Disney Company, Royal Caribbean Cruise Lines and banking giants Deutsche Bank and Barclays, according to documents obtained by The Nation. Blackwater's work for corporations and government agencies was contracted using two companies owned by Blackwater's owner and founder, Erik Prince: Total Intelligence Solutions and the Terrorism Research Center (TRC). Prince is listed as the chairman of both companies in internal company documents, which show how the web of companies functions as a highly coordinated operation. Officials from Total Intelligence, TRC and Blackwater (which now calls itself Xe Services) did not respond to numerous requests for comment for this article.
One of the most incendiary details in the documents is that Blackwater, through Total Intelligence, sought to become the "intel arm" of Monsanto, offering to provide operatives to infiltrate activist groups organizing against the multinational biotech firm.
Governmental recipients of intelligence services and counterterrorism training from Prince's companies include the Kingdom of Jordan, the Canadian military and the Netherlands police, as well as several US military bases, including Fort Bragg, home of the elite Joint Special Operations Command (JSOC), and Fort Huachuca, where military interrogators are trained, according to the documents. In addition, Blackwater worked through the companies for the Defense Intelligence Agency, the Defense Threat Reduction Agency and the US European Command.
On September 3 the New York Times reported that Blackwater had "created a web of more than 30 shell companies or subsidiaries in part to obtain millions of dollars in American government contracts after the security company came under intense criticism for reckless conduct in Iraq." The documents obtained by The Nation reveal previously unreported details of several such companies and open a rare window into the sensitive intelligence and security operations Blackwater performs for a range of powerful corporations and government agencies. The new evidence also sheds light on the key roles of several former top CIA officials who went on to work for Blackwater.
The coordinator of Blackwater's covert CIA business, former CIA paramilitary officer Enrique "Ric" Prado, set up a global network of foreign operatives, offering their "deniability" as a "big plus" for potential Blackwater customers, according to company documents. The CIA has long used proxy forces to carry out extralegal actions or to shield US government involvement in unsavory operations from scrutiny. In some cases, these "deniable" foreign forces don't even know who they are working for. Prado and Prince built up a network of such foreigners while Blackwater was at the center of the CIA's assassination program, beginning in 2004. They trained special missions units at one of Prince's properties in Virginia with the intent of hunting terrorism suspects globally, often working with foreign operatives. A former senior CIA official said the benefit of using Blackwater's foreign operatives in CIA operations was that "you wouldn't want to have American fingerprints on it."
While the network was originally established for use in CIA operations, documents show that Prado viewed it as potentially valuable to other government agencies. In an e-mail in October 2007 with the subject line "Possible Opportunity in DEA—Read and Delete," Prado wrote to a Total Intelligence executive with a pitch for the Drug Enforcement Administration. That executive was an eighteen-year DEA veteran with extensive government connections who had recently joined the firm. Prado explained that Blackwater had developed "a rapidly growing, worldwide network of folks that can do everything from surveillance to ground truth to disruption operations." He added, "These are all foreign nationals (except for a few cases where US persons are the conduit but no longer 'play' on the street), so deniability is built in and should be a big plus."
The executive wrote back and suggested there "may be an interest" in those services. The executive suggested that "one of the best places to start may be the Special Operations Division, (SOD) which is located in Chantilly, VA," telling Prado the name of the special agent in charge. The SOD is a secretive joint command within the Justice Department, run by the DEA. It serves as the command-and-control center for some of the most sensitive counternarcotics and law enforcement operations conducted by federal forces. The executive also told Prado that US attachés in Mexico; Bogotá, Colombia; and Bangkok, Thailand, would potentially be interested in Prado's network. Whether this network was activated, and for what customers, cannot be confirmed. A former Blackwater employee who worked on the company's CIA program declined to comment on Prado's work for the company, citing its classified status.
In November 2007 officials from Prince's companies developed a pricing structure for security and intelligence services for private companies and wealthy individuals. One official wrote that Prado had the capacity to "develop infrastructures" and "conduct ground-truth and security activities." According to the pricing chart, potential customers could hire Prado and other Blackwater officials to operate in the United States and globally: in Latin America, North Africa, francophone countries, the Middle East, Europe, China, Russia, Japan, and Central and Southeast Asia. A four-man team headed by Prado for countersurveillance in the United States cost $33,600 weekly, while "safehouses" could be established for $250,000, plus operational costs. Identical services were offered globally. For $5,000 a day, clients could hire Prado or former senior CIA officials Cofer Black and Robert Richer for "representation" to national "decision-makers." Before joining Blackwater, Black, a twenty-eight-year CIA veteran, ran the agency's counterterrorism center, while Richer was the agency's deputy director of operations. (Neither Black nor Richer currently works for the company.)
As Blackwater became embroiled in controversy following the Nisour Square massacre, Prado set up his own company, Constellation Consulting Group (CCG), apparently taking some of Blackwater's covert CIA work with him, though he maintained close ties to his former employer. In an e-mail to a Total Intelligence executive in February 2008, Prado wrote that he "recently had major success in developing capabilities in Mali [Africa] that are of extreme interest to our major sponsor and which will soon launch a substantial effort via my small shop." He requested Total Intelligence's help in analyzing the "North Mali/Niger terrorist problem."
In October 2009 Blackwater executives faced a crisis when they could not account for their government-issued Secure Telephone Unit, which is used by the CIA, the National Security Agency and other military and intelligence services for secure communications. A flurry of e-mails were sent around as personnel from various Blackwater entities tried to locate the device. One former Blackwater official wrote that because he had left the company it was "not really my problem," while another declared, "I have no 'dog in this fight.'" Eventually, Prado stepped in, e-mailing the Blackwater officials to "pass my number" to the "OGA POC," meaning the Other Government Agency (parlance for CIA) Point of Contact.
What relationship Prado's CCG has with the CIA is not known. An early version of his company's website boasted that "CCG professionals have already conducted operations on five continents, and have proven their ability to meet the most demanding client needs" and that the company has the "ability to manage highly-classified contracts." CCG, the site said, "is uniquely positioned to deliver services that no other company can, and can deliver results in the most remote areas with little or no outside support." Among the services advertised were "Intelligence and Counter-Intelligence (human and electronic), Unconventional Military Operations, Counterdrug Operations, Aviation Services, Competitive Intelligence, Denied Area Access...and Paramilitary Training."
The Nation has previously reported on Blackwater's work for the CIA and JSOC in Pakistan. New documents reveal a history of activity relating to Pakistan by Blackwater. Former Pakistani Prime Minister Benazir Bhutto worked with the company when she returned to Pakistan to campaign for the 2008 elections, according to the documents. In October 2007, when media reports emerged that Bhutto had hired "American security," senior Blackwater official Robert Richer wrote to company executives, "We need to watch this carefully from a number of angles. If our name surfaces, the Pakistani press reaction will be very important. How that plays through the Muslim world will also need tracking." Richer wrote that "we should be prepared to [sic] a communique from an affiliate of Al-Qaida if our name surfaces (BW). That will impact the security profile." Clearly a word is missing in the e-mail or there is a typo that leaves unclear what Richer meant when he mentioned the Al Qaeda communiqué. Bhutto was assassinated two months later. Blackwater officials subsequently scheduled a meeting with her family representatives in Washington, in January 2008.
Through Total Intelligence and the Terrorism Research Center, Blackwater also did business with a range of multinational corporations. According to internal Total Intelligence communications, biotech giant Monsanto—the world's largest supplier of genetically modified seeds—hired the firm in 2008–09. The relationship between the two companies appears to have been solidified in January 2008 when Total Intelligence chair Cofer Black traveled to Zurich to meet with Kevin Wilson, Monsanto's security manager for global issues.
After the meeting in Zurich, Black sent an e-mail to other Blackwater executives, including to Prince and Prado at their Blackwater e-mail addresses. Black wrote that Wilson "understands that we can span collection from internet, to reach out, to boots on the ground on legit basis protecting the Monsanto [brand] name.... Ahead of the curve info and insight/heads up is what he is looking for." Black added that Total Intelligence "would develop into acting as intel arm of Monsanto." Black also noted that Monsanto was concerned about animal rights activists and that they discussed how Blackwater "could have our person(s) actually join [activist] group(s) legally." Black wrote that initial payments to Total Intelligence would be paid out of Monsanto's "generous protection budget" but would eventually become a line item in the company's annual budget. He estimated the potential payments to Total Intelligence at between $100,000 and $500,000. According to documents, Monsanto paid Total Intelligence $127,000 in 2008 and $105,000 in 2009.
Reached by telephone and asked about the meeting with Black in Zurich, Monsanto's Wilson initially said, "I'm not going to discuss it with you." In a subsequent e-mail to The Nation, Wilson confirmed he met Black in Zurich and that Monsanto hired Total Intelligence in 2008 and worked with the company until early 2010. He denied that he and Black discussed infiltrating animal rights groups, stating "there was no such discussion." He claimed that Total Intelligence only provided Monsanto "with reports about the activities of groups or individuals that could pose a risk to company personnel or operations around the world which were developed by monitoring local media reports and other publicly available information. The subject matter ranged from information regarding terrorist incidents in Asia or kidnappings in Central America to scanning the content of activist blogs and websites." Wilson asserted that Black told him Total Intelligence was "a completely separate entity from Blackwater."
Monsanto was hardly the only powerful corporation to enlist the services of Blackwater's constellation of companies. The Walt Disney Company hired Total Intelligence and TRC to do a "threat assessment" for potential film shoot locations in Morocco, with former CIA officials Black and Richer reaching out to their former Moroccan intel counterparts for information. The job provided a "good chance to impress Disney," one company executive wrote. How impressed Disney was is not clear; in 2009 the company paid Total Intelligence just $24,000.
Total Intelligence and TRC also provided intelligence assessments on China to Deutsche Bank. "The Chinese technical counterintelligence threat is one of the highest in the world," a TRC analyst wrote, adding, "Many four and five star hotel rooms and restaurants are live-monitored with both audio and video" by Chinese intelligence. He also said that computers, PDAs and other electronic devices left unattended in hotel rooms could be cloned. Cellphones using the Chinese networks, the analyst wrote, could have their microphones remotely activated, meaning they could operate as permanent listening devices. He concluded that Deutsche Bank reps should "bring no electronic equipment into China." Warning of the use of female Chinese agents, the analyst wrote, "If you don't have women coming onto you all the time at home, then you should be suspicious if they start coming onto you when you arrive in China." For these and other services, the bank paid Total Intelligence $70,000 in 2009.
TRC also did background checks on Libyan and Saudi businessmen for British banking giant Barclays. In February 2008 a TRC executive e-mailed Prado and Richer revealing that Barclays asked TRC and Total Intelligence for background research on the top executives from the Saudi Binladin Group (SBG) and their potential "associations/connections with the Royal family and connections with Osama bin Ladin." In his report, Richer wrote that SBG's chair, Bakr Mohammed bin Laden, "is well and favorably known to both arab and western intelligence service[s]" for cooperating in the hunt for Osama bin Laden. Another SBG executive, Sheikh Saleh bin Laden, is described by Richer as "a very savvy businessman" who is "committed to operating with full transparency to Saudi's security services" and is considered "the most vehement within the extended BL family in terms of criticizing UBL's actions and beliefs."
In August Blackwater and the State Department reached a $42 million settlement for hundreds of violations of US export control regulations. Among the violations cited was the unauthorized export of technical data to the Canadian military. Meanwhile, Blackwater's dealings with Jordanian officials are the subject of a federal criminal prosecution of five former top Blackwater executives. The Jordanian government paid Total Intelligence more than $1.6 million in 2009.
Some of the training Blackwater provided to Canadian military forces was in Blackwater/TRC's "Mirror Image" course, where trainees live as a mock Al Qaeda cell in an effort to understand the mindset and culture of insurgents. Company literature describes it as "a classroom and field training program designed to simulate terrorist recruitment, training, techniques and operational tactics." Documents show that in March 2009 Blackwater/TRC spent $6,500 purchasing local tribal clothing in Afghanistan as well as assorted "propaganda materials—posters, Pakistan Urdu maps, etc." for Mirror Image, and another $9,500 on similar materials this past January in Pakistan and Afghanistan.
According to internal documents, in 2009 alone the Canadian military paid Blackwater more than $1.6 million through TRC. A Canadian military official praised the program in a letter to the center, saying it provided "unique and valid cultural awareness and mission specific deployment training for our soldiers in Afghanistan," adding that it was "a very effective and operationally current training program that is beneficial to our mission."
This past summer Erik Prince put Blackwater up for sale and moved to Abu Dhabi, United Arab Emirates. But he doesn't seem to be leaving the shadowy world of security and intelligence. He says he moved to Abu Dhabi because of its "great proximity to potential opportunities across the entire Middle East, and great logistics," adding that it has "a friendly business climate, low to no taxes, free trade and no out of control trial lawyers or labor unions. It's pro-business and opportunity." It also has no extradition treaty with the United States.
Wednesday, September 15, 2010
More Weapons for the Middle East?
It does not get better than this. Below is an article from the WSJ announcing the largest weapons sales in US history to a troubled location and we must celebrate the jobs created by it...
Enjoy...
Saudi Arms Deal Advances
White House to Notify Congress Soon of $60 Billion Package, Largest Ever for U.S.
By ADAM ENTOUS
The Obama administration is set to notify Congress of plans to offer advanced aircraft to Saudi Arabia worth up to $60 billion, the largest U.S. arms deal ever, and is in talks with the kingdom about potential naval and missile-defense upgrades that could be worth tens of billions of dollars more.
The administration plans to tout the $60 billion package as a major job creator—supporting at least 75,000 jobs, according to company estimates—and sees the sale of advanced fighter jets and military helicopters to key Middle Eastern ally Riyadh as part of a broader policy aimed at shoring up Arab allies against Iran.
Earlier
· August 14, 2010: U.S.-Saudi Arms Plan Grows to Record Size
The talks between the U.S. and Saudi Arabia have been widely known for months, but many new details are only now coming into focus. These include the number and type of aircraft involved, how much the Saudis intend to spend in an initial installment, and the ongoing negotiations to also upgrade the kingdom's navy and missile defenses.
The $60 billion in fighter jets and helicopters is the top-line amount requested by the Saudis, even though the kingdom is likely to commit initially to buying only about half that amount.
In a notification to Congress, expected to be submitted this week or next, the administration will authorize the Saudis to buy as many as 84 new F-15 fighters, upgrade 70 more, and purchase three types of helicopters—70 Apaches, 72 Black Hawks and 36 Little Birds, officials said.
The notification triggers a congressional review. Lawmakers could push for changes or seek to impose conditions, and potentially block the deal, though that is not expected.
On top of the $60 billion package of fighter jets and helicopters, U.S. officials are discussing a potential $30 billion package to upgrade Saudi Arabia's naval forces. An official described these as "discreet, bilateral conversations" in which no agreement has yet been reached. That deal could include littoral combat ships, surface vessels intended for operations close to shore, the official said.
Talks are also underway to expand Saudi Arabia's ballistic-missile defenses. The U.S. is encouraging the Saudis to buy systems known as THAAD—Terminal High Altitude Defense—and to upgrade its Patriot missiles to reduce the threat from Iranian rockets. U.S. officials said it was unclear how much this package would be worth.
The U.S. has sought to build up missile defense across the region, and the Saudi package could be similar to one in the United Arab Emirates, officials said. THAAD is built by Lockheed Martin Corp. and Raytheon Co. supplies the system's radar. THAAD is the first system designed to defend against short- and intermediate-range ballistic missiles both inside and outside the Earth's atmosphere. It complements the lower-aimed Patriot missile defense system, providing a layered defense.
Lockheed officials have stated that they see serious export potential for the system in the Middle East, where a major concern exists about Iran's ballistic missile development.
The prospect for job growth could help build support in Congress for the $60 billion package, officials said. "It's a big economic sale for the U.S. and the argument is that it is better to create jobs here than in Europe," said one person close to the talks.
Boeing Co., which makes the F-15s, the Apaches and the Little Birds, believes the Saudi package would directly or indirectly support 77,000 jobs across 44 states. It is unclear how many jobs, if any, would be supported by the Saudi purchase of Black Hawks, made by Sikorsky. Production levels are already high at Sikorsky, which is owned by United Technologies Co.
The Saudis in recent years have broadened their acquisitions to include more European- and Russian-made weaponry. That thinking was partially behind Riyadh's 2007 deal to purchase dozens of Eurofighter fighter planes from BAE Systems PLC, Saudi officials said.
Pro-Israel lawmakers have voiced concerns in the past about arms sales to Saudi Arabia that they say may undercut Israel's military edge and provide support to a government with a poor human rights record.
U.S. officials say the Israelis are increasingly comfortable with the Saudi sale because the planes won't have certain long-range weapons systems. Also, the Israelis are in line to buy a more advanced fighter, the F-35, and should begin to receive them around the same time the Saudis are expected to start getting the F-15s. "We appreciate the administration's efforts to maintain Israel's qualitative military edge, and we expect to continue to discuss our concerns with the administration about the issues," said Michael Oren, the Israeli ambassador to the U.S.
The senior U.S. defense official said it was unclear what pieces of equipment in the $60 billion package the Saudis may decide not to purchase, but he described the F-15s as a priority item. "It's conceivable that the Saudis could come back for the whole $60 billion," the official said, but added, "They're balancing their own defense priorities."
The $60 billion deal will be stretched out over five to 10 years, depending on production schedules, training, and infrastructure improvements, officials said.
Anthony Cordesman, a scholar at the Center for Strategic and International Studies, said the deal is so large and so complex, that changes are inevitable.
"The actual contract often is renegotiated because the Saudis are always going to push, we're always going to push, the Congress is going to push, the manufacturer is going to push. This is not the kind of negotiation where you've really agreed on the final details until you actually have put the final contract out," he said.
—Nathan Hodge contributed to this article.
Wonderful....
Enjoy...
Saudi Arms Deal Advances
White House to Notify Congress Soon of $60 Billion Package, Largest Ever for U.S.
By ADAM ENTOUS
The Obama administration is set to notify Congress of plans to offer advanced aircraft to Saudi Arabia worth up to $60 billion, the largest U.S. arms deal ever, and is in talks with the kingdom about potential naval and missile-defense upgrades that could be worth tens of billions of dollars more.
The administration plans to tout the $60 billion package as a major job creator—supporting at least 75,000 jobs, according to company estimates—and sees the sale of advanced fighter jets and military helicopters to key Middle Eastern ally Riyadh as part of a broader policy aimed at shoring up Arab allies against Iran.
Earlier
· August 14, 2010: U.S.-Saudi Arms Plan Grows to Record Size
The talks between the U.S. and Saudi Arabia have been widely known for months, but many new details are only now coming into focus. These include the number and type of aircraft involved, how much the Saudis intend to spend in an initial installment, and the ongoing negotiations to also upgrade the kingdom's navy and missile defenses.
The $60 billion in fighter jets and helicopters is the top-line amount requested by the Saudis, even though the kingdom is likely to commit initially to buying only about half that amount.
In a notification to Congress, expected to be submitted this week or next, the administration will authorize the Saudis to buy as many as 84 new F-15 fighters, upgrade 70 more, and purchase three types of helicopters—70 Apaches, 72 Black Hawks and 36 Little Birds, officials said.
The notification triggers a congressional review. Lawmakers could push for changes or seek to impose conditions, and potentially block the deal, though that is not expected.
On top of the $60 billion package of fighter jets and helicopters, U.S. officials are discussing a potential $30 billion package to upgrade Saudi Arabia's naval forces. An official described these as "discreet, bilateral conversations" in which no agreement has yet been reached. That deal could include littoral combat ships, surface vessels intended for operations close to shore, the official said.
Talks are also underway to expand Saudi Arabia's ballistic-missile defenses. The U.S. is encouraging the Saudis to buy systems known as THAAD—Terminal High Altitude Defense—and to upgrade its Patriot missiles to reduce the threat from Iranian rockets. U.S. officials said it was unclear how much this package would be worth.
The U.S. has sought to build up missile defense across the region, and the Saudi package could be similar to one in the United Arab Emirates, officials said. THAAD is built by Lockheed Martin Corp. and Raytheon Co. supplies the system's radar. THAAD is the first system designed to defend against short- and intermediate-range ballistic missiles both inside and outside the Earth's atmosphere. It complements the lower-aimed Patriot missile defense system, providing a layered defense.
Lockheed officials have stated that they see serious export potential for the system in the Middle East, where a major concern exists about Iran's ballistic missile development.
The prospect for job growth could help build support in Congress for the $60 billion package, officials said. "It's a big economic sale for the U.S. and the argument is that it is better to create jobs here than in Europe," said one person close to the talks.
Boeing Co., which makes the F-15s, the Apaches and the Little Birds, believes the Saudi package would directly or indirectly support 77,000 jobs across 44 states. It is unclear how many jobs, if any, would be supported by the Saudi purchase of Black Hawks, made by Sikorsky. Production levels are already high at Sikorsky, which is owned by United Technologies Co.
The Saudis in recent years have broadened their acquisitions to include more European- and Russian-made weaponry. That thinking was partially behind Riyadh's 2007 deal to purchase dozens of Eurofighter fighter planes from BAE Systems PLC, Saudi officials said.
Pro-Israel lawmakers have voiced concerns in the past about arms sales to Saudi Arabia that they say may undercut Israel's military edge and provide support to a government with a poor human rights record.
U.S. officials say the Israelis are increasingly comfortable with the Saudi sale because the planes won't have certain long-range weapons systems. Also, the Israelis are in line to buy a more advanced fighter, the F-35, and should begin to receive them around the same time the Saudis are expected to start getting the F-15s. "We appreciate the administration's efforts to maintain Israel's qualitative military edge, and we expect to continue to discuss our concerns with the administration about the issues," said Michael Oren, the Israeli ambassador to the U.S.
The senior U.S. defense official said it was unclear what pieces of equipment in the $60 billion package the Saudis may decide not to purchase, but he described the F-15s as a priority item. "It's conceivable that the Saudis could come back for the whole $60 billion," the official said, but added, "They're balancing their own defense priorities."
The $60 billion deal will be stretched out over five to 10 years, depending on production schedules, training, and infrastructure improvements, officials said.
Anthony Cordesman, a scholar at the Center for Strategic and International Studies, said the deal is so large and so complex, that changes are inevitable.
"The actual contract often is renegotiated because the Saudis are always going to push, we're always going to push, the Congress is going to push, the manufacturer is going to push. This is not the kind of negotiation where you've really agreed on the final details until you actually have put the final contract out," he said.
—Nathan Hodge contributed to this article.
Wonderful....
Tuesday, December 22, 2009
The State of US Unemployment
I don't know what to think when I read articles like the one below. There are no protests in the streets, nobody seems to really care, and nobody seems to want to make it all better...
Enjoy the article anyway...
States' jobless funds are being drained in recession
By Peter Whoriskey
Washington Post Staff Writer
Tuesday, December 22, 2009; A01
The recession's jobless toll is draining unemployment-compensation funds so fast that according to federal projections, 40 state programs will go broke within two years and need $90 billion in loans to keep issuing the benefit checks.
The shortfalls are putting pressure on governments to either raise taxes or shrink the aid payments.
Debates over the state benefit programs have erupted in South Carolina, Nevada, Kansas, Vermont and Indiana. And the budget gaps are expected to spread and become more acute in the coming year, compelling legislators in many states to reconsider their operations.
Currently, 25 states have run out of unemployment money and have borrowed $24 billion from the federal government to cover the gaps. By 2011, according to Department of Labor estimates, 40 state funds will have been emptied by the jobless tsunami.
"There's immense pressure, and it's got to be faced," said Indiana state Rep. David Niezgodski (D), a sponsor of a bill that addressed the gaps in Indiana's unemployment program. "Our system was absolutely broke."
The Indiana legislation protected the aid checks, Niezgodski said, but it came after a give-and-take this spring in which Gov. Mitchell E. Daniels Jr. (R) said the state had been providing "Rolls-Royce benefits" and several thousand union workers countered by protesting proposed cuts at the state capitol. In January, the legislature is slated to consider a bill to delay the proposed tax increases intended to refill the fund.
In Nevada, Gov. Jim Gibbons (R) and legislators have feuded over the unemployment program, which is $85 million in debt to the federal government, with Gibbons accusing the legislature of "callous disregard" for not setting a tax rate.
And last week, a state task force in Kentucky recommended cutting benefits about 9 percent and imposing a week's delay in their payment. The average benefit check there is about $309 a week. The task force also proposed raising taxes.
"There were some moments of high anxiety" during the negotiations between industry and labor groups, said Joseph U. Meyer, the state's acting secretary of education and workforce development. "But in the end, the realistic options became fairly apparent."
State unemployment-compensation funds are separated from general budgets, so when there is a shortfall, only two primary solutions are typically considered -- either cut the benefit or raise the payroll tax.
Industry and business groups often lobby against raising the payroll tax on employers, while unions and other worker groups protest benefit cuts.
"We want to make sure Kentucky remains competitive and also maintain an environment of fairness," Meyer said of the negotiations.
Nationally, the average tax is about 0.6 percent of payroll; the average weekly check is about $300.
The troubles the state programs face can be traced to a failure during the economic boom to properly prepare for a downturn, experts said.
Unemployment benefits are funded by the payroll tax on employers that is collected at a rate that is supposed to keep the funds solvent. Firms that fire lots of people are supposed to pay higher rates. The federal government pays for administrative costs, and in a recession, it pays for the extension of unemployment benefits beyond 26 weeks. But over the years, the drive to minimize state taxes on employers has reduced the funds to unsustainable levels.
"The benefits haven't grown -- that's not the problem," said Richard Hobbie, director of the National Association of State Workforce Agencies.
Even so, he said, he expects to see unemployment checks reduced.
A shortfall in a state unemployment fund, he said, "usually means cuts in eligibility or benefits."
In Virginia, the unemployment program has borrowed $89 million from the federal government, while Maryland has not borrowed, according to the federal data.
Wayne Vroman, an expert in unemployment insurance at the Urban Institute, said that entering the recession, state programs were on average funded at only one-third the level they should have been, according to generally accepted funding guidelines.
"If you fund a program adequately, you don't need to come to these kinds of difficult decisions," he said.
Before the recession, he said, the funding guidelines "were rarely honored."
While the amount of the states' loans from the federal government is expected to grow rapidly, it is not expected to add to the federal debt. "In the past, the federal government has always gotten its money back," Vroman said.
In the meantime, however, more states are struggling to fill the gap. West Virginia imposed a freeze on benefit levels this year, and legislators in South Carolina are considering one.
"We've obviously got problems with the fund," said South Carolina House Majority Leader Kenny Bingham (R), blaming the trouble in part on the state's unemployment rate of more than 12 percent.
The state owes about $654 million to the federal government for unemployment payments.
"We're not trying to cut benefits," he said. But "if you jack rates up, those business that are struggling to hang on, you make things more difficult."
Enjoy the article anyway...
States' jobless funds are being drained in recession
By Peter Whoriskey
Washington Post Staff Writer
Tuesday, December 22, 2009; A01
The recession's jobless toll is draining unemployment-compensation funds so fast that according to federal projections, 40 state programs will go broke within two years and need $90 billion in loans to keep issuing the benefit checks.
The shortfalls are putting pressure on governments to either raise taxes or shrink the aid payments.
Debates over the state benefit programs have erupted in South Carolina, Nevada, Kansas, Vermont and Indiana. And the budget gaps are expected to spread and become more acute in the coming year, compelling legislators in many states to reconsider their operations.
Currently, 25 states have run out of unemployment money and have borrowed $24 billion from the federal government to cover the gaps. By 2011, according to Department of Labor estimates, 40 state funds will have been emptied by the jobless tsunami.
"There's immense pressure, and it's got to be faced," said Indiana state Rep. David Niezgodski (D), a sponsor of a bill that addressed the gaps in Indiana's unemployment program. "Our system was absolutely broke."
The Indiana legislation protected the aid checks, Niezgodski said, but it came after a give-and-take this spring in which Gov. Mitchell E. Daniels Jr. (R) said the state had been providing "Rolls-Royce benefits" and several thousand union workers countered by protesting proposed cuts at the state capitol. In January, the legislature is slated to consider a bill to delay the proposed tax increases intended to refill the fund.
In Nevada, Gov. Jim Gibbons (R) and legislators have feuded over the unemployment program, which is $85 million in debt to the federal government, with Gibbons accusing the legislature of "callous disregard" for not setting a tax rate.
And last week, a state task force in Kentucky recommended cutting benefits about 9 percent and imposing a week's delay in their payment. The average benefit check there is about $309 a week. The task force also proposed raising taxes.
"There were some moments of high anxiety" during the negotiations between industry and labor groups, said Joseph U. Meyer, the state's acting secretary of education and workforce development. "But in the end, the realistic options became fairly apparent."
State unemployment-compensation funds are separated from general budgets, so when there is a shortfall, only two primary solutions are typically considered -- either cut the benefit or raise the payroll tax.
Industry and business groups often lobby against raising the payroll tax on employers, while unions and other worker groups protest benefit cuts.
"We want to make sure Kentucky remains competitive and also maintain an environment of fairness," Meyer said of the negotiations.
Nationally, the average tax is about 0.6 percent of payroll; the average weekly check is about $300.
The troubles the state programs face can be traced to a failure during the economic boom to properly prepare for a downturn, experts said.
Unemployment benefits are funded by the payroll tax on employers that is collected at a rate that is supposed to keep the funds solvent. Firms that fire lots of people are supposed to pay higher rates. The federal government pays for administrative costs, and in a recession, it pays for the extension of unemployment benefits beyond 26 weeks. But over the years, the drive to minimize state taxes on employers has reduced the funds to unsustainable levels.
"The benefits haven't grown -- that's not the problem," said Richard Hobbie, director of the National Association of State Workforce Agencies.
Even so, he said, he expects to see unemployment checks reduced.
A shortfall in a state unemployment fund, he said, "usually means cuts in eligibility or benefits."
In Virginia, the unemployment program has borrowed $89 million from the federal government, while Maryland has not borrowed, according to the federal data.
Wayne Vroman, an expert in unemployment insurance at the Urban Institute, said that entering the recession, state programs were on average funded at only one-third the level they should have been, according to generally accepted funding guidelines.
"If you fund a program adequately, you don't need to come to these kinds of difficult decisions," he said.
Before the recession, he said, the funding guidelines "were rarely honored."
While the amount of the states' loans from the federal government is expected to grow rapidly, it is not expected to add to the federal debt. "In the past, the federal government has always gotten its money back," Vroman said.
In the meantime, however, more states are struggling to fill the gap. West Virginia imposed a freeze on benefit levels this year, and legislators in South Carolina are considering one.
"We've obviously got problems with the fund," said South Carolina House Majority Leader Kenny Bingham (R), blaming the trouble in part on the state's unemployment rate of more than 12 percent.
The state owes about $654 million to the federal government for unemployment payments.
"We're not trying to cut benefits," he said. But "if you jack rates up, those business that are struggling to hang on, you make things more difficult."
Wednesday, December 9, 2009
Tiger, Tiger
Hey. Here is a great analysis of the Tiger Woods story from a different angle. I found it to be more believable than the one in the mainstream press...
Give it a read...
http://deadspin.com/5416948/chaos-in-tigerland-a-deadspin-investigation-into-the-sexual-habits-of-pro-athletes
See, I told ya...
Give it a read...
http://deadspin.com/5416948/chaos-in-tigerland-a-deadspin-investigation-into-the-sexual-habits-of-pro-athletes
See, I told ya...
Debt in the UK shocks the citizens...
I found this article on Marketwatch's website. It was of course quickly removed... But it is still amazing... Enjoy...
Dec. 4, 2009
U.K. government bank rescue cost $1.4 trillion
By Steve Goldstein, MarketWatch
LONDON (MarketWatch) -- The British government aid to banks totalled 850 billion pounds ($1.4 trillion), according to a report by the country's National Audit Office released Friday.
The report tabulated both the cost of buying up shares in lenders Royal Bank of Scotland (NYSE:RBS) and Lloyds Banking Group (NYSE:LYG) as well as providing 250 billion pounds of guarantees, 280 pounds of insurance on toxic assets, 200 billion pounds of Bank of England loss indemnification and 40 billion pounds of loans. Treasury's net cash outlay for purchases of shares in banks and lending to the banking sector, including Northern Rock which was nationalized in September 2007, will amount to about 117 billion pounds.
How much the taxpayer will lose from the assistance remains in doubt, it said, though the Treasury estimated last April that the loss will range between 20 billion and 50 billion pounds.
And lending to businesses through 2010 by the partly state-held banks, RBS and Lloyds, isn't likely to meet targets.
But the NAO report said the taxpayer has received something for the money -- it said there's been no disorderly failure of U.K. banks and no retail depositor has lost money.
The British government in October 2008 rescued RBS and HBOS, which is now a unit of Lloyds Banking Group, with secret assistance that was only revealed last week.
The U.K. also nationalized Northern Rock, and then sold some of Bradford & Bingley and resolved problems at the U.K. operations of stricken Icelandic banks.
The government also racked up 107 million pounds in advisory fees -- mostly to the law firm Slaughter & May and accounting groups PricewaterhouseCoopers, Ernst & Young, KPMG and BDO Stoy Hayward.
It also paid 15.4 million pounds to Credit Suisse (NYSE:CS) , 7.4 million pounds to BlackRock (NYSE:BLK) , 5.3 million pounds to Deutsche Bankm (NYSE:DB) , 5 million pounds to Citi (NYSE:C) , 4.5 million pounds to Goldman Sachs (NYSE:GS) and 1.5 million pounds Morgan Stanley (NYSE:MS) . RBS and Lloyds will pick up the tab on just under 100 million pounds of those fees, the report said.
So much debt - So little time
Dec. 4, 2009
U.K. government bank rescue cost $1.4 trillion
By Steve Goldstein, MarketWatch
LONDON (MarketWatch) -- The British government aid to banks totalled 850 billion pounds ($1.4 trillion), according to a report by the country's National Audit Office released Friday.
The report tabulated both the cost of buying up shares in lenders Royal Bank of Scotland (NYSE:RBS) and Lloyds Banking Group (NYSE:LYG) as well as providing 250 billion pounds of guarantees, 280 pounds of insurance on toxic assets, 200 billion pounds of Bank of England loss indemnification and 40 billion pounds of loans. Treasury's net cash outlay for purchases of shares in banks and lending to the banking sector, including Northern Rock which was nationalized in September 2007, will amount to about 117 billion pounds.
How much the taxpayer will lose from the assistance remains in doubt, it said, though the Treasury estimated last April that the loss will range between 20 billion and 50 billion pounds.
And lending to businesses through 2010 by the partly state-held banks, RBS and Lloyds, isn't likely to meet targets.
But the NAO report said the taxpayer has received something for the money -- it said there's been no disorderly failure of U.K. banks and no retail depositor has lost money.
The British government in October 2008 rescued RBS and HBOS, which is now a unit of Lloyds Banking Group, with secret assistance that was only revealed last week.
The U.K. also nationalized Northern Rock, and then sold some of Bradford & Bingley and resolved problems at the U.K. operations of stricken Icelandic banks.
The government also racked up 107 million pounds in advisory fees -- mostly to the law firm Slaughter & May and accounting groups PricewaterhouseCoopers, Ernst & Young, KPMG and BDO Stoy Hayward.
It also paid 15.4 million pounds to Credit Suisse (NYSE:CS) , 7.4 million pounds to BlackRock (NYSE:BLK) , 5.3 million pounds to Deutsche Bankm (NYSE:DB) , 5 million pounds to Citi (NYSE:C) , 4.5 million pounds to Goldman Sachs (NYSE:GS) and 1.5 million pounds Morgan Stanley (NYSE:MS) . RBS and Lloyds will pick up the tab on just under 100 million pounds of those fees, the report said.
So much debt - So little time
Tuesday, December 1, 2009
Damn, I forgot to buy the gun...
Great information from Bloomberg. Enjoy...
Arming Goldman With Pistols Against Public: Alice Schroeder
Commentary by Alice Schroeder
Dec. 1 (Bloomberg) -- “I just wrote my first reference for a gun permit,” said a friend, who told me of swearing to the good character of a Goldman Sachs Group Inc. banker who applied to the local police for a permit to buy a pistol. The banker had told this friend of mine that senior Goldman people have loaded up on firearms and are now equipped to defend themselves if there is a populist uprising against the bank.
I called Goldman Sachs spokesman Lucas van Praag to ask whether it’s true that Goldman partners feel they need handguns to protect themselves from the angry proletariat. He didn’t call me back. The New York Police Department has told me that “as a preliminary matter” it believes some of the bankers I inquired about do have pistol permits. The NYPD also said it will be a while before it can name names.
While we wait, Goldman has wrapped itself in the flag of Warren Buffett, with whom it will jointly donate $500 million, part of an effort to burnish its image -- and gain new Goldman clients. Goldman Sachs Chief Executive Officer Lloyd Blankfein also reversed himself after having previously called Goldman’s greed “God’s work” and apologized earlier this month for having participated in things that were “clearly wrong.”
Has it really come to this? Imagine what emotions must be billowing through the halls of Goldman Sachs to provoke the firm into an apology. Talk that Goldman bankers might have armed themselves in self-defense would sound ludicrous, were it not so apt a metaphor for the way that the most successful people on Wall Street have become a target for public rage.
Pistol Ready
Common sense tells you a handgun is probably not even all that useful. Suppose an intruder sneaks past the doorman or jumps the security fence at night. By the time you pull the pistol out of your wife’s jewelry safe, find the ammunition, and load your weapon, Fifi the Pomeranian has already been taken hostage and the gun won’t do you any good. As for carrying a loaded pistol when you venture outside, dream on. Concealed gun permits are almost impossible for ordinary citizens to obtain in New York or nearby states.
In other words, a little humility and contrition are probably the better route.
Until a couple of weeks ago, that was obvious to everyone but Goldman, a firm famous for both prescience and arrogance. In a display of both, Blankfein began to raise his personal- security threat level early in the financial crisis. He keeps a summer home near the Hamptons, where unrestricted public access would put him at risk if the angry mobs rose up and marched to the East End of Long Island.
To the Barricades
He tried to buy a house elsewhere without attracting attention as the financial crisis unfolded in 2007, a move that was foiled by the New York Post. Then, Blankfein got permission from the local authorities to install a security gate at his house two months before Bear Stearns Cos. collapsed.
This is the kind of foresight that Goldman Sachs is justly famous for. Blankfein somehow anticipated the persecution complex his fellow bankers would soon suffer. Surely, though, this man who can afford to surround himself with a private army of security guards isn’t sleeping with the key to a gun safe under his pillow. The thought is just too bizarre to be true.
So maybe other senior people at Goldman Sachs have gone out and bought guns, and they know something. But what?
Henry Paulson, U.S. Treasury secretary during the bailout and a former Goldman Sachs CEO, let it slip during testimony to Congress last summer when he explained why it was so critical to bail out Goldman Sachs, and -- oh yes -- the other banks. People “were unhappy with the big discrepancies in wealth, but they at least believed in the system and in some form of market-driven capitalism. But if we had a complete meltdown, it could lead to people questioning the basis of the system.”
Torn Curtain
There you have it. The bailout was meant to keep the curtain drawn on the way the rich make money, not from the free market, but from the lack of one. Goldman Sachs blew its cover when the firm’s revenue from trading reached a record $27 billion in the first nine months of this year, and a public that was writhing in financial agony caught on that the profits earned on taxpayer capital were going to pay employee bonuses.
This slip-up let the other bailed-out banks happily hand off public blame to Goldman, which is unpopular among its peers because it always seems to win at everyone’s expense.
Plenty of Wall Streeters worry about the big discrepancies in wealth, and think the rise of a financial industry-led plutocracy is unjust. That doesn’t mean any of them plan to move into a double-wide mobile home as a show of solidarity with the little people, though.
Cool Hand Lloyd
No, talk of Goldman and guns plays right into the way Wall- Streeters like to think of themselves. Even those who were bailed out believe they are tough, macho Clint Eastwoods of the financial frontier, protecting the fistful of dollars in one hand with the Glock in the other. The last thing they want is to be so reasonably paid that the peasants have no interest in lynching them.
And if the proles really do appear brandishing pitchforks at the doors of Park Avenue and the gates of Round Hill Road, you can be sure that the Goldman guys and their families will be holed up in their safe rooms with their firearms. If nothing else, that pistol permit might go part way toward explaining why they won’t be standing outside with the rest of the crowd, broke and humiliated, saying, “Damn, I was on the wrong side of a trade with Goldman again.”
(Alice Schroeder, author of “The Snowball: Warren Buffett and the Business of Life” and a former managing director at Morgan Stanley, is a Bloomberg News columnist. The opinions expressed are her own.)
Click on “Send Comment” in the sidebar display to send a letter to the editor.
To contact the writer of this column: Alice Schroeder at aliceschroeder@ymail.com.
I love this stuff...
Arming Goldman With Pistols Against Public: Alice Schroeder
Commentary by Alice Schroeder
Dec. 1 (Bloomberg) -- “I just wrote my first reference for a gun permit,” said a friend, who told me of swearing to the good character of a Goldman Sachs Group Inc. banker who applied to the local police for a permit to buy a pistol. The banker had told this friend of mine that senior Goldman people have loaded up on firearms and are now equipped to defend themselves if there is a populist uprising against the bank.
I called Goldman Sachs spokesman Lucas van Praag to ask whether it’s true that Goldman partners feel they need handguns to protect themselves from the angry proletariat. He didn’t call me back. The New York Police Department has told me that “as a preliminary matter” it believes some of the bankers I inquired about do have pistol permits. The NYPD also said it will be a while before it can name names.
While we wait, Goldman has wrapped itself in the flag of Warren Buffett, with whom it will jointly donate $500 million, part of an effort to burnish its image -- and gain new Goldman clients. Goldman Sachs Chief Executive Officer Lloyd Blankfein also reversed himself after having previously called Goldman’s greed “God’s work” and apologized earlier this month for having participated in things that were “clearly wrong.”
Has it really come to this? Imagine what emotions must be billowing through the halls of Goldman Sachs to provoke the firm into an apology. Talk that Goldman bankers might have armed themselves in self-defense would sound ludicrous, were it not so apt a metaphor for the way that the most successful people on Wall Street have become a target for public rage.
Pistol Ready
Common sense tells you a handgun is probably not even all that useful. Suppose an intruder sneaks past the doorman or jumps the security fence at night. By the time you pull the pistol out of your wife’s jewelry safe, find the ammunition, and load your weapon, Fifi the Pomeranian has already been taken hostage and the gun won’t do you any good. As for carrying a loaded pistol when you venture outside, dream on. Concealed gun permits are almost impossible for ordinary citizens to obtain in New York or nearby states.
In other words, a little humility and contrition are probably the better route.
Until a couple of weeks ago, that was obvious to everyone but Goldman, a firm famous for both prescience and arrogance. In a display of both, Blankfein began to raise his personal- security threat level early in the financial crisis. He keeps a summer home near the Hamptons, where unrestricted public access would put him at risk if the angry mobs rose up and marched to the East End of Long Island.
To the Barricades
He tried to buy a house elsewhere without attracting attention as the financial crisis unfolded in 2007, a move that was foiled by the New York Post. Then, Blankfein got permission from the local authorities to install a security gate at his house two months before Bear Stearns Cos. collapsed.
This is the kind of foresight that Goldman Sachs is justly famous for. Blankfein somehow anticipated the persecution complex his fellow bankers would soon suffer. Surely, though, this man who can afford to surround himself with a private army of security guards isn’t sleeping with the key to a gun safe under his pillow. The thought is just too bizarre to be true.
So maybe other senior people at Goldman Sachs have gone out and bought guns, and they know something. But what?
Henry Paulson, U.S. Treasury secretary during the bailout and a former Goldman Sachs CEO, let it slip during testimony to Congress last summer when he explained why it was so critical to bail out Goldman Sachs, and -- oh yes -- the other banks. People “were unhappy with the big discrepancies in wealth, but they at least believed in the system and in some form of market-driven capitalism. But if we had a complete meltdown, it could lead to people questioning the basis of the system.”
Torn Curtain
There you have it. The bailout was meant to keep the curtain drawn on the way the rich make money, not from the free market, but from the lack of one. Goldman Sachs blew its cover when the firm’s revenue from trading reached a record $27 billion in the first nine months of this year, and a public that was writhing in financial agony caught on that the profits earned on taxpayer capital were going to pay employee bonuses.
This slip-up let the other bailed-out banks happily hand off public blame to Goldman, which is unpopular among its peers because it always seems to win at everyone’s expense.
Plenty of Wall Streeters worry about the big discrepancies in wealth, and think the rise of a financial industry-led plutocracy is unjust. That doesn’t mean any of them plan to move into a double-wide mobile home as a show of solidarity with the little people, though.
Cool Hand Lloyd
No, talk of Goldman and guns plays right into the way Wall- Streeters like to think of themselves. Even those who were bailed out believe they are tough, macho Clint Eastwoods of the financial frontier, protecting the fistful of dollars in one hand with the Glock in the other. The last thing they want is to be so reasonably paid that the peasants have no interest in lynching them.
And if the proles really do appear brandishing pitchforks at the doors of Park Avenue and the gates of Round Hill Road, you can be sure that the Goldman guys and their families will be holed up in their safe rooms with their firearms. If nothing else, that pistol permit might go part way toward explaining why they won’t be standing outside with the rest of the crowd, broke and humiliated, saying, “Damn, I was on the wrong side of a trade with Goldman again.”
(Alice Schroeder, author of “The Snowball: Warren Buffett and the Business of Life” and a former managing director at Morgan Stanley, is a Bloomberg News columnist. The opinions expressed are her own.)
Click on “Send Comment” in the sidebar display to send a letter to the editor.
To contact the writer of this column: Alice Schroeder at aliceschroeder@ymail.com.
I love this stuff...
Thursday, November 12, 2009
Why is the price of oil going up again?
Here's a great article explaining why oil prices are being manipulated. Enjoy...
What the obscure Vopak says about the oil market
Commentary: Vopak, A.P. Moller-Maersk say there's plenty of oil supplies
By MarketWatch
LONDON (MarketWatch) -- The financial world isn't preoccupied with oil at the moment, not with issues like Goldman Sachs bonuses or Federal Reserve exit strategies to consider.
But it wasn't that long ago that oil was the number-one topic in the market, and should black gold resume prominence, the update on Thursday from a relatively obscure Dutch firm called Vopak (AMSTERDAM:NL:VPK) should be eyed.
Vopak is the world's largest independent tank terminal operator, so when it comes to storing oil, liquefied natural gas and the like, they know a few things. And on Thursday, the group raised earnings guidance for the second time this year. The reason? There are a few, but the main one is that demand for storing oil is strong.
A major reason to store, rather than sell, oil is if there aren't buyers for it. (Another would be a bet that prices in the future will grow significantly, but the futures complex at the moment is pricing in a 7% rise in 12 months and a 16% rise over five years -- hardly an irresistible siren song.)
Also take a look at what A.P. Moller-Maersk (SEAQ:UK:0LQM) , the shipping giant, said in its nine-month report on Thursday: "There are no short-term prospects of higher demand for oil and gas transports." About the only good news they reported in the third quarter from that division came as vessels were increasingly used as offshore storage facilities.
And what those European firms are saying tracks with what the admittedly-not-always-truthful OPEC has been maintaining all along -- the market is very well supplied. And similarly, while the International Energy Agency on Thursday hiked its 2009 and 2010 oil demand outlook, it pointed out that demand for gasoil used in railways and trucks is still pretty weak.
And, as the IEA also pointed out, the current price itself could derail recovery.
What it all suggests is that while demand for oil is certainly on the upswing, fundamentals aren't entirely behind the more than doubling in oil from February lows.
Speculators getting ahead of themselves? Nah, it couldn't be. In a market where oil reached as high as $147 a barrel, predicting prices is a fool's game. But know this -- there's plenty of oil sloshing around without a home.
-- Steve Goldstein
Thanks, Steve. Keep the information coming.
What the obscure Vopak says about the oil market
Commentary: Vopak, A.P. Moller-Maersk say there's plenty of oil supplies
By MarketWatch
LONDON (MarketWatch) -- The financial world isn't preoccupied with oil at the moment, not with issues like Goldman Sachs bonuses or Federal Reserve exit strategies to consider.
But it wasn't that long ago that oil was the number-one topic in the market, and should black gold resume prominence, the update on Thursday from a relatively obscure Dutch firm called Vopak (AMSTERDAM:NL:VPK) should be eyed.
Vopak is the world's largest independent tank terminal operator, so when it comes to storing oil, liquefied natural gas and the like, they know a few things. And on Thursday, the group raised earnings guidance for the second time this year. The reason? There are a few, but the main one is that demand for storing oil is strong.
A major reason to store, rather than sell, oil is if there aren't buyers for it. (Another would be a bet that prices in the future will grow significantly, but the futures complex at the moment is pricing in a 7% rise in 12 months and a 16% rise over five years -- hardly an irresistible siren song.)
Also take a look at what A.P. Moller-Maersk (SEAQ:UK:0LQM) , the shipping giant, said in its nine-month report on Thursday: "There are no short-term prospects of higher demand for oil and gas transports." About the only good news they reported in the third quarter from that division came as vessels were increasingly used as offshore storage facilities.
And what those European firms are saying tracks with what the admittedly-not-always-truthful OPEC has been maintaining all along -- the market is very well supplied. And similarly, while the International Energy Agency on Thursday hiked its 2009 and 2010 oil demand outlook, it pointed out that demand for gasoil used in railways and trucks is still pretty weak.
And, as the IEA also pointed out, the current price itself could derail recovery.
What it all suggests is that while demand for oil is certainly on the upswing, fundamentals aren't entirely behind the more than doubling in oil from February lows.
Speculators getting ahead of themselves? Nah, it couldn't be. In a market where oil reached as high as $147 a barrel, predicting prices is a fool's game. But know this -- there's plenty of oil sloshing around without a home.
-- Steve Goldstein
Thanks, Steve. Keep the information coming.
Thursday, July 2, 2009
Should have bought Goldman Sachs in October!!!!
Here is a perfect article explaining the reality of MONEY in America. Thanks Peter...
Why Wall Street pay will hit a record in 2009
by Peter Cohan
Jul 2nd 2009
2009 is turning out to be a great year for Wall Street pay. With unemployment at 9.5 percent and 6.5 million people out of work since 2007 wrapped up, you might be wondering how Wall Street could pull that off. The answer is simple: nobody makes the kind of campaign contributions that Wall Street does -- between 1998 and 2008, Wall Street made $1.725 billion in political contributions and spent another $3.4 billion on lobbyists.
So the taxes from American consumers coupled with trillions of new debt are being funneled into enriching the people who brought the financial world to its knees. How so? Government is rewarding Wall Street -- with $12.9 trillion in taxpayer funds, the Public Private Investment Partnership (PPIP), a $1 trillion no-lose deal for big asset managers and hedge funds to buy financial toxic waste, and new rules that will make it possible for private equity firms to own banks -- the very capital sources on which they depend for their highly leveraged deals.
How big will Wall Street bonuses be this year? Goldman Sachs Group (GS), which paid back its $10 billion in TARP money, is setting aside $20 billion for compensation this year -- $700,000 per employee, which is 6 percent more than it paid in its record 2007 compensation year. Morgan Stanley (MS) will give out between $11 billion and $14 billion in compensation -- close to the $340,000 per employee in record compensation that it paid in 2007.
How can these banks justify these huge compensation increases? Perhaps fear of comp cop, Kenneth Feinberg, is giving Wall Street a huge incentive to pay out as much as possible before he institutes pay limits. Morgan Stanley's pay is a much bigger than average 68 percent of revenues.
The record compensation is not related to superior financial performance. After all, financial results at these firms are way down from where they were in the first quarter of 2007. Goldman made $1.8 billion in the first quarter of 2009, 44 percent less than the $3.2 billion it earned in the first quarter of 2007. And Morgan Stanley lost $177 million in the first quarter of 2009 -- while making $2.7 billion in the first quarter of 2007. Morgan Stanley also repaid $10 billion and is expected to post a 32 cents a share loss in the second quarter.
In addition to all this, the FDIC is loosening rules to permit private equity firms to own their lenders. With 45 banks having failed so far this year, the FDIC needs all the help it can get. Private equity firms like Carlyle Group have plenty of capital and the FDIC would like to use it to help bail out banks -- as it did with BankUnited Financial Corporation in Florida.
But the new rules require private equity firms to hold their investment for as long as two years, increase their capital if they buy banks, and limit their ownership to 24.9 percent unless they want to become bank holding companies. Private equity firms can get around this last restriction by teaming up -- in club deals.
Wall Street rules Washington. And even though the comp cop is scaring Wall Street on pay, he can't stop it from paying itself record bonuses despite far weaker financial performance.
As our children and grandchildren assume the burdens of all the debt America has taken on to bail out Wall Street for its errors, it is worth asking whether we have a true Democracy or merely the best government that Wall Street can buy.
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.
Unbelieveable...
Why Wall Street pay will hit a record in 2009
by Peter Cohan
Jul 2nd 2009
2009 is turning out to be a great year for Wall Street pay. With unemployment at 9.5 percent and 6.5 million people out of work since 2007 wrapped up, you might be wondering how Wall Street could pull that off. The answer is simple: nobody makes the kind of campaign contributions that Wall Street does -- between 1998 and 2008, Wall Street made $1.725 billion in political contributions and spent another $3.4 billion on lobbyists.
So the taxes from American consumers coupled with trillions of new debt are being funneled into enriching the people who brought the financial world to its knees. How so? Government is rewarding Wall Street -- with $12.9 trillion in taxpayer funds, the Public Private Investment Partnership (PPIP), a $1 trillion no-lose deal for big asset managers and hedge funds to buy financial toxic waste, and new rules that will make it possible for private equity firms to own banks -- the very capital sources on which they depend for their highly leveraged deals.
How big will Wall Street bonuses be this year? Goldman Sachs Group (GS), which paid back its $10 billion in TARP money, is setting aside $20 billion for compensation this year -- $700,000 per employee, which is 6 percent more than it paid in its record 2007 compensation year. Morgan Stanley (MS) will give out between $11 billion and $14 billion in compensation -- close to the $340,000 per employee in record compensation that it paid in 2007.
How can these banks justify these huge compensation increases? Perhaps fear of comp cop, Kenneth Feinberg, is giving Wall Street a huge incentive to pay out as much as possible before he institutes pay limits. Morgan Stanley's pay is a much bigger than average 68 percent of revenues.
The record compensation is not related to superior financial performance. After all, financial results at these firms are way down from where they were in the first quarter of 2007. Goldman made $1.8 billion in the first quarter of 2009, 44 percent less than the $3.2 billion it earned in the first quarter of 2007. And Morgan Stanley lost $177 million in the first quarter of 2009 -- while making $2.7 billion in the first quarter of 2007. Morgan Stanley also repaid $10 billion and is expected to post a 32 cents a share loss in the second quarter.
In addition to all this, the FDIC is loosening rules to permit private equity firms to own their lenders. With 45 banks having failed so far this year, the FDIC needs all the help it can get. Private equity firms like Carlyle Group have plenty of capital and the FDIC would like to use it to help bail out banks -- as it did with BankUnited Financial Corporation in Florida.
But the new rules require private equity firms to hold their investment for as long as two years, increase their capital if they buy banks, and limit their ownership to 24.9 percent unless they want to become bank holding companies. Private equity firms can get around this last restriction by teaming up -- in club deals.
Wall Street rules Washington. And even though the comp cop is scaring Wall Street on pay, he can't stop it from paying itself record bonuses despite far weaker financial performance.
As our children and grandchildren assume the burdens of all the debt America has taken on to bail out Wall Street for its errors, it is worth asking whether we have a true Democracy or merely the best government that Wall Street can buy.
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.
Unbelieveable...
Friday, June 26, 2009
A Dark Day for Music
Michael Jackson is dead. I am speechless and hurt. I feel like a piece of my childhood has been permanently removed. I'll miss you, man. We all loved you and will always remember you...
Sunday, June 21, 2009
WE ARE SUCKERS!!!!
Read this one and enjoy the raping by Goldman Sachs...
http://www.guardian.co.uk/business/2009/jun/21/goldman-sachs-bonus-payments
Goldman to make record bonus payoutSurviving banks accused of undermining stability
Phillip Inman
The Observer, Sunday 21 June 2009
Staff at Goldman Sachs staff can look forward to the biggest bonus payouts in the firm's 140-year history after a spectacular first half of the year, sparking concern that the big investment banks which survived the credit crunch will derail financial regulation reforms.
A lack of competition and a surge in revenues from trading foreign currency, bonds and fixed-income products has sent profits at Goldman Sachs soaring, according to insiders at the firm.
Staff in London were briefed last week on the banking and securities company's prospects and told they could look forward to bumper bonuses if, as predicted, it completed its most profitable year ever. Figures next month detailing the firm's second-quarter earnings are expected to show a further jump in profits. Warren Buffett, who bought $5bn of the company's shares in January, has already made a $1bn gain on his investment.
Goldman is expected to be the biggest winner in the race for revenues that, in 2006, reached £186bn across the entire industry. While this figure is expected to fall to £160bn in 2009, it will be split among a smaller number of firms.
Barclays Capital, Credit Suisse and Deutsche Bank are among the European firms expected to register bumper profits, along with US banks JP Morgan and Morgan Stanley following the near collapse and government rescue of major trading houses including Citigroup, Merrill Lynch, UBS and Royal Bank of Scotland.
In April, Goldman said it would set aside half of its £1.2bn first-quarter profit to reward staff, much of it in bonuses. It is believed to have paid 973 bankers $1m or more last year, while this year's payouts are on track to be the highest for most of the bank's 28,000 staff, including about 5,400 in London.
Critics of the bonus culture in the City said the dominance of a few risk-taking investment banks is undermining the efforts of regulators to stabilise the financial system.
Vince Cable, the Liberal Democrat treasury spokesman, said: "The investment banks more than any other institutions created the culture of excessive leverage, excessive risk and excessive bonuses that led to the downfall of the financial system. Now they are cashing in and the same bonus culture has returned. The result must be that we are being pushed to the edge of another crash."
Goldman Sachs said it reviewed its bonus scheme last year and switched from a system of guaranteed rewards that were paid over three years to variable payments that tied staff to the firm. It told employees last year that profit-related bonuses would be delayed by 12 months.
Until the release of its first quarter profits in April, it seemed inconceivable that a firm owing the US government $10bn would be looking to break all-time records in 2009.
David Williams, an investment banking analyst at Fox Pitt Kelton, said: "This year is shaping up to be the best year ever for investment banks, or at least those that have emerged relatively unscathed from the credit crisis.
"These banks are intermediaries in the bond markets where governments and companies are raising billions of pounds of new money. There is also a lack of competition that means they can charge huge sums for doing business."
Last week, the firm predicted that President Barack Obama's government could issue $3.25tn of debt before September, almost four times last year's sum. Goldman, a prime broker of US government bonds, is expected to make hundreds of millions of dollars in profits from selling and dealing in the bonds.
By the way, I looked for an article in the US press on this subject by could not find one...
http://www.guardian.co.uk/business/2009/jun/21/goldman-sachs-bonus-payments
Goldman to make record bonus payoutSurviving banks accused of undermining stability
Phillip Inman
The Observer, Sunday 21 June 2009
Staff at Goldman Sachs staff can look forward to the biggest bonus payouts in the firm's 140-year history after a spectacular first half of the year, sparking concern that the big investment banks which survived the credit crunch will derail financial regulation reforms.
A lack of competition and a surge in revenues from trading foreign currency, bonds and fixed-income products has sent profits at Goldman Sachs soaring, according to insiders at the firm.
Staff in London were briefed last week on the banking and securities company's prospects and told they could look forward to bumper bonuses if, as predicted, it completed its most profitable year ever. Figures next month detailing the firm's second-quarter earnings are expected to show a further jump in profits. Warren Buffett, who bought $5bn of the company's shares in January, has already made a $1bn gain on his investment.
Goldman is expected to be the biggest winner in the race for revenues that, in 2006, reached £186bn across the entire industry. While this figure is expected to fall to £160bn in 2009, it will be split among a smaller number of firms.
Barclays Capital, Credit Suisse and Deutsche Bank are among the European firms expected to register bumper profits, along with US banks JP Morgan and Morgan Stanley following the near collapse and government rescue of major trading houses including Citigroup, Merrill Lynch, UBS and Royal Bank of Scotland.
In April, Goldman said it would set aside half of its £1.2bn first-quarter profit to reward staff, much of it in bonuses. It is believed to have paid 973 bankers $1m or more last year, while this year's payouts are on track to be the highest for most of the bank's 28,000 staff, including about 5,400 in London.
Critics of the bonus culture in the City said the dominance of a few risk-taking investment banks is undermining the efforts of regulators to stabilise the financial system.
Vince Cable, the Liberal Democrat treasury spokesman, said: "The investment banks more than any other institutions created the culture of excessive leverage, excessive risk and excessive bonuses that led to the downfall of the financial system. Now they are cashing in and the same bonus culture has returned. The result must be that we are being pushed to the edge of another crash."
Goldman Sachs said it reviewed its bonus scheme last year and switched from a system of guaranteed rewards that were paid over three years to variable payments that tied staff to the firm. It told employees last year that profit-related bonuses would be delayed by 12 months.
Until the release of its first quarter profits in April, it seemed inconceivable that a firm owing the US government $10bn would be looking to break all-time records in 2009.
David Williams, an investment banking analyst at Fox Pitt Kelton, said: "This year is shaping up to be the best year ever for investment banks, or at least those that have emerged relatively unscathed from the credit crisis.
"These banks are intermediaries in the bond markets where governments and companies are raising billions of pounds of new money. There is also a lack of competition that means they can charge huge sums for doing business."
Last week, the firm predicted that President Barack Obama's government could issue $3.25tn of debt before September, almost four times last year's sum. Goldman, a prime broker of US government bonds, is expected to make hundreds of millions of dollars in profits from selling and dealing in the bonds.
By the way, I looked for an article in the US press on this subject by could not find one...
Thursday, June 18, 2009
Here's what it's all about...
A story from the NY Post:
BAILOUT BONUS AT BOFA
By MARK DeCAMBRE
June 18, 2009 --
Bailed-out Bank of America has been doling out millions in bonuses in an effort to lure talent and keep investment bankers who management views as vital, sources tell The Post.
Among those who are said to have received payouts are two former Merrill Lynch bankers, Fares Noujaim, who was recently appointed as BofA's vice chairman of investment banking, and Harry McMahon, a well-connected West Coast-based banker. Both were offered guarantees not to leave the firm.
Noujaim, a former Bear Stearns banker who joined Merrill last year, is said to have received roughly $15 million over two years.
Sources say Noujaim -- a well-regarded banker focusing on the Middle East -- was offered a vice-chairman role, and may have been offered at least $5 million more to stay. His earlier employment contract was nullified once Merrill merged with BofA earlier this year, sources said.
The guarantees being shelled out by the embattled bank run by CEO Ken Lewis are raising eyebrows on Wall Street because BofA has taken $45 billion in capital from the Troubled Asset Relief Program and hasn't been allowed to refund that money.
A BofA spokeswoman argued that paying talented employees top dollar to stay is necessary because rival firms are poaching its best execs at an alarming rate.
"Competitive recruiting in investment banking and capital markets continues to be very intense and we're taking the steps necessary to retain key talent in response to competitive pressures," said spokeswoman Jessica Oppenheim.
She added, "Any reference to [a] specific associate's compensation in this story is inaccurate."
The issue of bonus payments by TARP recipients became a flash point earlier this year when Congress discovered that American International Group shelled out $454 million in retention bonuses after receiving a total of $182.5 billion in rescue cash.
Since then, Washington has clamped down on how banks in general, and TARP banks in particular, pay their employees. Last week, the Obama administration named Kenneth Feinberg its pay czar to oversee how TARP recipients pay their top 100 employees.
However, compensation is also a sore spot for banks under the government's thumb, as they try to compete with foreign banks not subject to restraints on pay.
Meanwhile, internally, BofA's guarantees have added to the friction that already exists between former Merrill workers and BofA employees, the latter of whom complain Merrill bankers are more often getting the guarantee bonuses.
mark.decambre@nypost.com
Hey we are in the wrong jobs. We should risk everyone else's money and then get bailed out and take a bonus for our hard work...
BAILOUT BONUS AT BOFA
By MARK DeCAMBRE
June 18, 2009 --
Bailed-out Bank of America has been doling out millions in bonuses in an effort to lure talent and keep investment bankers who management views as vital, sources tell The Post.
Among those who are said to have received payouts are two former Merrill Lynch bankers, Fares Noujaim, who was recently appointed as BofA's vice chairman of investment banking, and Harry McMahon, a well-connected West Coast-based banker. Both were offered guarantees not to leave the firm.
Noujaim, a former Bear Stearns banker who joined Merrill last year, is said to have received roughly $15 million over two years.
Sources say Noujaim -- a well-regarded banker focusing on the Middle East -- was offered a vice-chairman role, and may have been offered at least $5 million more to stay. His earlier employment contract was nullified once Merrill merged with BofA earlier this year, sources said.
The guarantees being shelled out by the embattled bank run by CEO Ken Lewis are raising eyebrows on Wall Street because BofA has taken $45 billion in capital from the Troubled Asset Relief Program and hasn't been allowed to refund that money.
A BofA spokeswoman argued that paying talented employees top dollar to stay is necessary because rival firms are poaching its best execs at an alarming rate.
"Competitive recruiting in investment banking and capital markets continues to be very intense and we're taking the steps necessary to retain key talent in response to competitive pressures," said spokeswoman Jessica Oppenheim.
She added, "Any reference to [a] specific associate's compensation in this story is inaccurate."
The issue of bonus payments by TARP recipients became a flash point earlier this year when Congress discovered that American International Group shelled out $454 million in retention bonuses after receiving a total of $182.5 billion in rescue cash.
Since then, Washington has clamped down on how banks in general, and TARP banks in particular, pay their employees. Last week, the Obama administration named Kenneth Feinberg its pay czar to oversee how TARP recipients pay their top 100 employees.
However, compensation is also a sore spot for banks under the government's thumb, as they try to compete with foreign banks not subject to restraints on pay.
Meanwhile, internally, BofA's guarantees have added to the friction that already exists between former Merrill workers and BofA employees, the latter of whom complain Merrill bankers are more often getting the guarantee bonuses.
mark.decambre@nypost.com
Hey we are in the wrong jobs. We should risk everyone else's money and then get bailed out and take a bonus for our hard work...
Wednesday, June 17, 2009
What the hell is this all about.... - Part 2
Here is a following up commentary found on Bloomberg.
Link: http://www.bloomberg.com/apps/news?pid=20601039&sid=a62_boqkurbI
Suitcase With $134 Billion Puts Dollar on Edge: William Pesek
Commentary by William Pesek
June 17 (Bloomberg) -- It’s a plot better suited for a John Le Carre novel.
Two Japanese men are detained in Italy after allegedly attempting to take $134 billion worth of U.S. bonds over the border into Switzerland. Details are maddeningly sketchy, so naturally the global rumor mill is kicking into high gear.
Are these would-be smugglers agents of Kim Jong Il stashing North Korea’s cash in a Swiss vault? Bagmen for Nigerian Internet scammers? Was the money meant for terrorists looking to buy nuclear warheads? Is Japan dumping its dollars secretly? Are the bonds real or counterfeit?
The implications of the securities being legitimate would be bigger than investors may realize. At a minimum, it would suggest that the U.S. risks losing control over its monetary supply on a massive scale.
The trillions of dollars of debt the U.S. will issue in the next couple of years needs buyers. Attracting them will require making sure that existing ones aren’t losing faith in the U.S.’s ability to control the dollar.
The dollar is, for better or worse, the core of our world economy and it’s best to keep it stable. News that’s more fitting for international spy novels than the financial pages won’t help that effort. It is incumbent upon the U.S. Treasury to get to the bottom of this tale and keep markets informed.
GDP Carriers
Think about it: These two guys were carrying the gross domestic product of New Zealand or enough for three Beijing Olympics. If economies were for sale, the men could buy Slovakia and Croatia and have plenty left over for Mongolia or Cambodia. Yes, they could have built vacation homes amidst Genghis Khan’s Gobi Desert or the famed Temples of Angkor. Bernard Madoff who?
These men carrying bonds concealed in the bottom of their luggage also would be the fourth-largest U.S. creditors. It makes you wonder if some of the time Treasury Secretary Timothy Geithner spends keeping the Chinese and Japanese invested in dollars should be devoted to well-financed men crossing the Italian-Swiss border.
This tale has gotten little attention in markets, perhaps because of the absurdity of our times. The last year has been a decidedly disorienting one for capitalists who once knew up from down, red from black and risk from reward. It almost fits with the surreal nature of today that a couple of travelers have more U.S. debt than Brazil in a suitcase and, well, that’s life.
Clancy Bestseller
You can almost picture Tom Clancy sitting in his study thinking: “Damn! Why didn’t I think of this yarn and novelize it years ago?” He could have sprinkled in a Chinese angle, a pinch of Russian intrigue, a dose of Pyongyang and a bit of Taiwan-Strait tension into the mix. Presto, a sure bestseller.
Daniel Craig may be thinking this is a great story on which to base the next James Bond flick. Perhaps Don Johnson could buy the rights to this tale. In 2002, the “Miami Vice” star was stopped by German customs officers as he was traveling in a car carrying credit notes and other securities worth as much as $8 billion. Now he could claim it was all, uh, research.
When I first heard of the $134 billion story, I was tempted to glance at my calendar to make sure it didn’t read April 1.
Let’s assume for a moment that these U.S. bonds are real. That would make a mockery of Japanese Finance Minister Kaoru Yosano’s “absolutely unshakable” confidence in the credibility of the U.S. dollar. Yosano would have some explaining to do about Japan’s $686 billion of U.S. debt if more of these suitcase capers come to light.
‘Kennedy Bonds’
Counterfeit $100 bills are one thing; two guys with undeclared bonds including 249 certificates worth $500 million and 10 “Kennedy bonds” of $1 billion each is quite another.
The bust could be a boon for Italy. If the securities are found to be genuine, the smugglers could be fined 40 percent of the total value for attempting to take them out of the country. Not a bad payday for a government grappling with a widening budget deficit and rebuilding the town of L’Aquila, which was destroyed by an earthquake in April.
It would be terrible news for the White House. Other than the U.S., China or Japan, no other nation could theoretically move those amounts. In the absence of clear explanations coming from the Treasury, conspiracy theories are filling the void.
On his blog, the Market Ticker, Karl Denninger wonders if the Treasury “has been surreptitiously issuing bonds to, say, Japan, as a means of financing deficits that someone didn’t want reported over the last, oh, say 10 or 20 years.” Adds Denninger: “Let’s hope we get those answers, and this isn’t one of those ‘funny things’ that just disappears into the night.”
This is still a story with far more questions than answers. It’s odd, though, that it’s not garnering more media attention. Interest is likely to grow. The last thing Geithner and Federal Reserve Chairman Ben Bernanke need right now is tens of billions more of U.S. bonds -- or even high-quality fake ones -- suddenly popping up around the globe.
(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net
Last Updated: June 16, 2009 15:00 EDT
Link: http://www.bloomberg.com/apps/news?pid=20601039&sid=a62_boqkurbI
Suitcase With $134 Billion Puts Dollar on Edge: William Pesek
Commentary by William Pesek
June 17 (Bloomberg) -- It’s a plot better suited for a John Le Carre novel.
Two Japanese men are detained in Italy after allegedly attempting to take $134 billion worth of U.S. bonds over the border into Switzerland. Details are maddeningly sketchy, so naturally the global rumor mill is kicking into high gear.
Are these would-be smugglers agents of Kim Jong Il stashing North Korea’s cash in a Swiss vault? Bagmen for Nigerian Internet scammers? Was the money meant for terrorists looking to buy nuclear warheads? Is Japan dumping its dollars secretly? Are the bonds real or counterfeit?
The implications of the securities being legitimate would be bigger than investors may realize. At a minimum, it would suggest that the U.S. risks losing control over its monetary supply on a massive scale.
The trillions of dollars of debt the U.S. will issue in the next couple of years needs buyers. Attracting them will require making sure that existing ones aren’t losing faith in the U.S.’s ability to control the dollar.
The dollar is, for better or worse, the core of our world economy and it’s best to keep it stable. News that’s more fitting for international spy novels than the financial pages won’t help that effort. It is incumbent upon the U.S. Treasury to get to the bottom of this tale and keep markets informed.
GDP Carriers
Think about it: These two guys were carrying the gross domestic product of New Zealand or enough for three Beijing Olympics. If economies were for sale, the men could buy Slovakia and Croatia and have plenty left over for Mongolia or Cambodia. Yes, they could have built vacation homes amidst Genghis Khan’s Gobi Desert or the famed Temples of Angkor. Bernard Madoff who?
These men carrying bonds concealed in the bottom of their luggage also would be the fourth-largest U.S. creditors. It makes you wonder if some of the time Treasury Secretary Timothy Geithner spends keeping the Chinese and Japanese invested in dollars should be devoted to well-financed men crossing the Italian-Swiss border.
This tale has gotten little attention in markets, perhaps because of the absurdity of our times. The last year has been a decidedly disorienting one for capitalists who once knew up from down, red from black and risk from reward. It almost fits with the surreal nature of today that a couple of travelers have more U.S. debt than Brazil in a suitcase and, well, that’s life.
Clancy Bestseller
You can almost picture Tom Clancy sitting in his study thinking: “Damn! Why didn’t I think of this yarn and novelize it years ago?” He could have sprinkled in a Chinese angle, a pinch of Russian intrigue, a dose of Pyongyang and a bit of Taiwan-Strait tension into the mix. Presto, a sure bestseller.
Daniel Craig may be thinking this is a great story on which to base the next James Bond flick. Perhaps Don Johnson could buy the rights to this tale. In 2002, the “Miami Vice” star was stopped by German customs officers as he was traveling in a car carrying credit notes and other securities worth as much as $8 billion. Now he could claim it was all, uh, research.
When I first heard of the $134 billion story, I was tempted to glance at my calendar to make sure it didn’t read April 1.
Let’s assume for a moment that these U.S. bonds are real. That would make a mockery of Japanese Finance Minister Kaoru Yosano’s “absolutely unshakable” confidence in the credibility of the U.S. dollar. Yosano would have some explaining to do about Japan’s $686 billion of U.S. debt if more of these suitcase capers come to light.
‘Kennedy Bonds’
Counterfeit $100 bills are one thing; two guys with undeclared bonds including 249 certificates worth $500 million and 10 “Kennedy bonds” of $1 billion each is quite another.
The bust could be a boon for Italy. If the securities are found to be genuine, the smugglers could be fined 40 percent of the total value for attempting to take them out of the country. Not a bad payday for a government grappling with a widening budget deficit and rebuilding the town of L’Aquila, which was destroyed by an earthquake in April.
It would be terrible news for the White House. Other than the U.S., China or Japan, no other nation could theoretically move those amounts. In the absence of clear explanations coming from the Treasury, conspiracy theories are filling the void.
On his blog, the Market Ticker, Karl Denninger wonders if the Treasury “has been surreptitiously issuing bonds to, say, Japan, as a means of financing deficits that someone didn’t want reported over the last, oh, say 10 or 20 years.” Adds Denninger: “Let’s hope we get those answers, and this isn’t one of those ‘funny things’ that just disappears into the night.”
This is still a story with far more questions than answers. It’s odd, though, that it’s not garnering more media attention. Interest is likely to grow. The last thing Geithner and Federal Reserve Chairman Ben Bernanke need right now is tens of billions more of U.S. bonds -- or even high-quality fake ones -- suddenly popping up around the globe.
(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net
Last Updated: June 16, 2009 15:00 EDT
What the hell is this all about....
This is a good read and here is the actual link:
http://www.ibtimes.com/articles/20090611/italy-seizes-135b-us-bonds-from-two-japanese-citizens.htm
Italy seizes $135B of US bonds from two Japanese nationals
Two Japanese citizens carrying $134 billion worth of U.S. bonds were detained last week by Italy's financial police at Chiasso (40km from Milan) on the border between Italy and Switzerland, an Italian daily said Wednesday.
According to the report, they include 249 U.S. Treasury bonds each worth $500 million, plus 10 Kennedy bonds and other U.S. government securities worth a billion dollar each.
The two unidentified Japanese citizen were searched on June 3 when they were in Chiasso. They were detained on suspicion of attempting to take a large amount of securities out of Italy without declaring it.
The bonds were found hidden in the bottom of the suitcase, in a closed section separated from the part of the bag containing personal items.
Apart from the securities the Japanese men were carrying a considerable sum of original bank documents.
Investigations are underway to establish the identity and the origin of both the bonds and the bank documents that have also been impounded.
In order to stop money laundering Italian law sets a ceiling of €10,000 per person for importing or exporting money without declaring it. The penalty for violating the law is 40 per cent of the money seized.
If the certificates were real, the fine alone would amount to US$ 38 billion, five times the estimated cost of rebuilding quake-devastated Abruzzi region. It would help Italy’s eliminate its public deficit.
If the certificates are fakes the two Japanese nationals could get a very lengthy jail sentence for fraud.
The US Embassy in Rome was informed.
Great story - any comments!!!
http://www.ibtimes.com/articles/20090611/italy-seizes-135b-us-bonds-from-two-japanese-citizens.htm
Italy seizes $135B of US bonds from two Japanese nationals
Two Japanese citizens carrying $134 billion worth of U.S. bonds were detained last week by Italy's financial police at Chiasso (40km from Milan) on the border between Italy and Switzerland, an Italian daily said Wednesday.
According to the report, they include 249 U.S. Treasury bonds each worth $500 million, plus 10 Kennedy bonds and other U.S. government securities worth a billion dollar each.
The two unidentified Japanese citizen were searched on June 3 when they were in Chiasso. They were detained on suspicion of attempting to take a large amount of securities out of Italy without declaring it.
The bonds were found hidden in the bottom of the suitcase, in a closed section separated from the part of the bag containing personal items.
Apart from the securities the Japanese men were carrying a considerable sum of original bank documents.
Investigations are underway to establish the identity and the origin of both the bonds and the bank documents that have also been impounded.
In order to stop money laundering Italian law sets a ceiling of €10,000 per person for importing or exporting money without declaring it. The penalty for violating the law is 40 per cent of the money seized.
If the certificates were real, the fine alone would amount to US$ 38 billion, five times the estimated cost of rebuilding quake-devastated Abruzzi region. It would help Italy’s eliminate its public deficit.
If the certificates are fakes the two Japanese nationals could get a very lengthy jail sentence for fraud.
The US Embassy in Rome was informed.
Great story - any comments!!!
Saturday, May 16, 2009
What's really going on here...Part 2
I have copied this from another posting. The author wanted the news spread before the information was taken down. I have included all information and give credit to the author. Give it a read...
Thursday, May 14, 2009
Mark Patterson: "It's A Sham. The Banks Are Insolvent"
Posted by Tyler Durden at 8:40 PM
Update 2: Please see the most recent post in this thread, in which I disclose that representatives of Mr. Patterson dispute the original Ambrose Evans-Pritchard article was "fabricated" and have succeeded in getting the Daily Telegraph to remove it.
Update: Daily Telegraph story now "mysteriously" taken down.
The chairman of $7 billion distressed Private Equity firm and TARP beneficiary MatlinPatterson calls a spade a spade and in the process exposes the entire Geithner plan for the complete sham that it is. His comments before the Qatar Global Investment Forum were captured by the Daily Telegraph's Evans-Pritchard earlier, and Zero Hedge republishes the piece in its entirety as it presents every nuance of our predicament with masterful simplicity.
***
US 'sham' bank bail-outs enrich speculators, says buy-out chief Mark Patterson
The US Treasury’s effort to stabilise the banking system through the TARP programme is a hopelessly ill-conceived policy that enriches speculators at public expense, according to the buy-out firm supposed to be pioneering the joint public-private bank rescues.
“The taxpayers ought to know that we are in effect receiving a subsidy. They put in 40pc of the money but get little of the equity upside,” said Mark Patterson, chairman of MatlinPatterson Advisers.
The comments are likely to infuriate Tim Geithner, the US Treasury Secretary, because MatlinPatterson took advantage of the TARP’s matching funds to buy Flagstar Bancorp in Michigan. His confession appears to validate concerns that the bail-out strategy is geared towards Wall Street.
Under the convoluted deal agreed earlier this year, MatlinPatterson has come to own 80pc of the shares while the US government has ended up with under 10pc.
Mr Patterson said the US Treasury is out of its depth and seems to be trying to put off drastic action by pretending that the banking system is still viable.
“It’s a sham. The banks are insolvent. The US government is trying to sedate the public because they are down to the last $100bn (£66bn) of the $700bn TARP funds. They think they’re doing this for the greater good of society,” he said, speaking at the Qatar Global Investment Forum.
Mr Patterson said it would be better for the US to bite the bullet as Britain has done, accepting that crippled lenders must be nationalised. “At least the British are not hiding the bail-out,” he said.
MatlinPatterson said private equity and hedge funds were deluding themselves in hoping to go back to business as usual after the trauma of the last 18 months.
“This is not a normal recession and there will be no V-shaped recovery. The crisis has destroyed leveraged companies. We’re going to see a catastrophic increase in the number of LBO’s (leveraged buyouts) going into default because they’re knee-deep in debt and no solution exists since they can’t refinance,” he said.
“Alfa hedge funds have been making their money by gambling with excessive leverage, so the knife that cuts off leverage is going to cut off their heads as well,” he said.
Like many bears, Mr Patterson expects the great crunch to end in deliberate inflation, deemed a lesser evil than outright depression.
“The US government has thrown 29pc of GDP at this crisis compared to 8pc in the early 1930s. The Fed’s balance sheet has risen from $900bn to $2.7 trillion to bail out the system. America has to do it because the only way out is to debase the currency, but that is going to lead to some very high inflation three years down the road,” he said.
Matlin Patterson, however, has missed the Spring rebound, the most powerful rise in equities in over 70 years. “We shorted the equity rally because we thought it was lunatic. We’ve kept adding positions seven times, and we’re still holding,” he said. Ouch!
Wow!!! Again I credit the author, Tyler Durden. Thanks, man...
Thursday, May 14, 2009
Mark Patterson: "It's A Sham. The Banks Are Insolvent"
Posted by Tyler Durden at 8:40 PM
Update 2: Please see the most recent post in this thread, in which I disclose that representatives of Mr. Patterson dispute the original Ambrose Evans-Pritchard article was "fabricated" and have succeeded in getting the Daily Telegraph to remove it.
Update: Daily Telegraph story now "mysteriously" taken down.
The chairman of $7 billion distressed Private Equity firm and TARP beneficiary MatlinPatterson calls a spade a spade and in the process exposes the entire Geithner plan for the complete sham that it is. His comments before the Qatar Global Investment Forum were captured by the Daily Telegraph's Evans-Pritchard earlier, and Zero Hedge republishes the piece in its entirety as it presents every nuance of our predicament with masterful simplicity.
***
US 'sham' bank bail-outs enrich speculators, says buy-out chief Mark Patterson
The US Treasury’s effort to stabilise the banking system through the TARP programme is a hopelessly ill-conceived policy that enriches speculators at public expense, according to the buy-out firm supposed to be pioneering the joint public-private bank rescues.
“The taxpayers ought to know that we are in effect receiving a subsidy. They put in 40pc of the money but get little of the equity upside,” said Mark Patterson, chairman of MatlinPatterson Advisers.
The comments are likely to infuriate Tim Geithner, the US Treasury Secretary, because MatlinPatterson took advantage of the TARP’s matching funds to buy Flagstar Bancorp in Michigan. His confession appears to validate concerns that the bail-out strategy is geared towards Wall Street.
Under the convoluted deal agreed earlier this year, MatlinPatterson has come to own 80pc of the shares while the US government has ended up with under 10pc.
Mr Patterson said the US Treasury is out of its depth and seems to be trying to put off drastic action by pretending that the banking system is still viable.
“It’s a sham. The banks are insolvent. The US government is trying to sedate the public because they are down to the last $100bn (£66bn) of the $700bn TARP funds. They think they’re doing this for the greater good of society,” he said, speaking at the Qatar Global Investment Forum.
Mr Patterson said it would be better for the US to bite the bullet as Britain has done, accepting that crippled lenders must be nationalised. “At least the British are not hiding the bail-out,” he said.
MatlinPatterson said private equity and hedge funds were deluding themselves in hoping to go back to business as usual after the trauma of the last 18 months.
“This is not a normal recession and there will be no V-shaped recovery. The crisis has destroyed leveraged companies. We’re going to see a catastrophic increase in the number of LBO’s (leveraged buyouts) going into default because they’re knee-deep in debt and no solution exists since they can’t refinance,” he said.
“Alfa hedge funds have been making their money by gambling with excessive leverage, so the knife that cuts off leverage is going to cut off their heads as well,” he said.
Like many bears, Mr Patterson expects the great crunch to end in deliberate inflation, deemed a lesser evil than outright depression.
“The US government has thrown 29pc of GDP at this crisis compared to 8pc in the early 1930s. The Fed’s balance sheet has risen from $900bn to $2.7 trillion to bail out the system. America has to do it because the only way out is to debase the currency, but that is going to lead to some very high inflation three years down the road,” he said.
Matlin Patterson, however, has missed the Spring rebound, the most powerful rise in equities in over 70 years. “We shorted the equity rally because we thought it was lunatic. We’ve kept adding positions seven times, and we’re still holding,” he said. Ouch!
Wow!!! Again I credit the author, Tyler Durden. Thanks, man...
Tuesday, April 21, 2009
What's really going on here...
I am copying a posting from a blogger called, Greed is Good, because I do not want it to disappear before everyone can read it... All credit for this information goes to Greed and thanks...
"The Turner Radio Network has obtained "stress test" results for the top 19 Banks in the USA.
The stress tests were conducted to determine how well, if at all, the top 19 banks in the USA could withstand further or future economic hardship.
When the tests were completed, regulators within the Treasury and inside the Federal Reserve began bickering with each other as to whether or not the test results should be made public. That bickering continues to this very day as evidenced by this "main stream media" report.
The Turner Radio Network has obtained the stress test results. They are very bad. The most salient points from the stress tests appear below.
1) Of the top nineteen (19) banks in the nation, sixteen (16) are already technically insolvent. (Based upon the “alternative more adverse” scenario which had a 3.3 percent contraction of the U.S. Economy in 2009, accompanied by 8.9 percent unemployment, followed by 0.5 percent growth of the U.S. Economy but a 10.3 percent jobless in 2010.)
2) Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in non-paying loans. (Without further government injections of cash)
3) If any two of the 16 insolvent banks go under, they will totally wipe out all remaining FDIC insurance funding.
4) Of the top 19 banks in the nation, the top five (5) largest banks are under capitalized so dangerously, there is serious doubt about their ability to continue as ongoing businesses.
5) Five large U.S. banks have credit exposure related to their derivatives trading that exceeds their capital, with four in particular - JPMorgan Chase, Goldman Sachs, HSBC Bank America and Citibank - taking especially large risks.
6) Bank of America`s total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank`s was 278 percent; JPMorgan Chase`s, 382 percent; and HSBC America`s, 550 percent. It gets even worse: Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital! (HSBC is NOT in the top 19 banks undergoing a stress test, but is mentioned in the report as an aside because of its risk capital exposure to derivatives)
7) Not only are there serious questions about whether or not JPMorgan Chase, Goldman Sachs,Citibank, Wells Fargo, Sun Trust Bank, HSBC Bank USA, can continue in business, more than 1,800 regional and smaller institutions are at risk of failure despite government bailouts!
The debt crisis is much greater than the government has reported. The FDIC`s "Problem List" of troubled banks includes 252 institutions with assets of $159 billion. 1,816 banks and thrifts are at risk of failure, with total assets of $4.67 trillion, compared to 1,568 institutions, with $2.32 trillion in total assets in prior quarter."
All you can do is hope that it's not true... If it is true, what have these guys done to you average folk?
Thanks, again to "Greed is Good"
"The Turner Radio Network has obtained "stress test" results for the top 19 Banks in the USA.
The stress tests were conducted to determine how well, if at all, the top 19 banks in the USA could withstand further or future economic hardship.
When the tests were completed, regulators within the Treasury and inside the Federal Reserve began bickering with each other as to whether or not the test results should be made public. That bickering continues to this very day as evidenced by this "main stream media" report.
The Turner Radio Network has obtained the stress test results. They are very bad. The most salient points from the stress tests appear below.
1) Of the top nineteen (19) banks in the nation, sixteen (16) are already technically insolvent. (Based upon the “alternative more adverse” scenario which had a 3.3 percent contraction of the U.S. Economy in 2009, accompanied by 8.9 percent unemployment, followed by 0.5 percent growth of the U.S. Economy but a 10.3 percent jobless in 2010.)
2) Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in non-paying loans. (Without further government injections of cash)
3) If any two of the 16 insolvent banks go under, they will totally wipe out all remaining FDIC insurance funding.
4) Of the top 19 banks in the nation, the top five (5) largest banks are under capitalized so dangerously, there is serious doubt about their ability to continue as ongoing businesses.
5) Five large U.S. banks have credit exposure related to their derivatives trading that exceeds their capital, with four in particular - JPMorgan Chase, Goldman Sachs, HSBC Bank America and Citibank - taking especially large risks.
6) Bank of America`s total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank`s was 278 percent; JPMorgan Chase`s, 382 percent; and HSBC America`s, 550 percent. It gets even worse: Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital! (HSBC is NOT in the top 19 banks undergoing a stress test, but is mentioned in the report as an aside because of its risk capital exposure to derivatives)
7) Not only are there serious questions about whether or not JPMorgan Chase, Goldman Sachs,Citibank, Wells Fargo, Sun Trust Bank, HSBC Bank USA, can continue in business, more than 1,800 regional and smaller institutions are at risk of failure despite government bailouts!
The debt crisis is much greater than the government has reported. The FDIC`s "Problem List" of troubled banks includes 252 institutions with assets of $159 billion. 1,816 banks and thrifts are at risk of failure, with total assets of $4.67 trillion, compared to 1,568 institutions, with $2.32 trillion in total assets in prior quarter."
All you can do is hope that it's not true... If it is true, what have these guys done to you average folk?
Thanks, again to "Greed is Good"
Wednesday, March 26, 2008
Whose making money on the war?
The War Industry, maybe... Here is a wonderful article about our wonderful defense contractors... Money... Money... Money...
General Dynamics, Harris, L-3 Lead Gains From 5-Year Iraq War
By Edmond Lococo
March 25 (Bloomberg) -- General Dynamics Corp., Harris Corp. and L-3 Communications Holdings Inc. benefited most among the Pentagon's 25 largest military suppliers from five years of conflict in Iraq, based on a combination of war-related sales and stock gains.
General Dynamics and Harris, the Melbourne, Florida-based maker of combat radios, both tripled in stock price in the five years ended March 20, the anniversary of the war's start. L-3, which provides translators, rose 164 percent. Their gains beat the Standard & Poor's 500 Stock Index, which rose 52 percent, and the S&P Aerospace and Defense Index, which more than doubled.
The U.S. has begun reducing troops in Iraq, a process that may accelerate next year and threaten revenue of companies that gained the most from the war. Heavy combat use of vehicles and equipment still will trigger years of replacement sales. War costs are about $12 billion a month, the Pentagon said Jan. 28.
``The war has been a huge benefit to almost all contractors,'' said William Hartung, director of the arms and security initiative at the New America Foundation in New York. ``Ammunition, armor, vehicles, communications are places where there's a lot of spending now, and they will have to repair or replace much of it when the war ends.''
Congress has approved about $700 billion for conflicts in Iraq and Afghanistan since the 2001 terror attacks, the Congressional Research Service says. That's on top of the regular defense budget, which is $480 billion this year.
The U.S. is pulling five of 20 combat brigades out of Iraq through July. The pace next year may be set by the winner of November's U.S. presidential election, a showdown between presumptive Republican nominee John McCain, an Arizona senator, and either Senate colleague Barack Obama of Illinois or Hillary Clinton of New York for the Democrats.
General Dynamics
General Dynamics benefited from funding to buy and support Abrams tanks and Stryker troop transports, as well as ammunition sales. The company had about $2.35 billion in war revenue last year, the most among U.S. defense companies, based on estimates by Joseph Nadol, an analyst with JP Morgan Securities Inc. in New York. At about 9 percent of sales, it was second to Harris by percentage.
Spokesman Robert Doolittle of Falls Church, Virginia-based General Dynamics declined to confirm the data. ``We don't track orders, revenue or income based on where it's going,'' he said.
General Dynamics rose to fourth on the Pentagon's list of prime contractors in 2006, with $10.5 billion in work, from fifth in 2002 at $6.96 billion. The list excludes money received as a subcontractor. The Defense Department hasn't released 2007 data.
``General Dynamics' business would not be nearly as robust without the war,'' Cai Von Rumohr, a Boston-based analyst with Cowen & Co., said in an interview.
Harris
Harris received an estimated $600 million of war-related sales last year, or about 13 percent of its total, Nadol said. That was the largest proportion among major defense companies.
Harris became the Pentagon's 25th-largest supplier in 2006, with $1.34 billion in prime contracts, from 48th in 2002.
``There has been some benefit from Iraq, but our future is not tied to Iraq or levels of troop deployment, or whether the war is coming to an end,'' Chief Financial Officer Gary McArthur said in an interview. He said he was unable to provide a figure for how much annual revenue Harris has received from the war.
Harris makes Falcon II radios, which can be mounted in vehicles or carried by soldiers. The radios also can carry data and video as part of an upgrade program that may cost as much as $30 billion, McArthur said.
``The whole need to modernize is not dependent on levels of troops in, or not in, Iraq,'' the executive said.
Analyst Nadol has doubts. ``A combat-vehicle maker like General Dynamics is less exposed than an equipment provider such as Harris'' to a drop in revenue, he said.
L-3
New York-based L-3 benefited through its role as the largest supplier of translation services for the Army in Iraq. L-3 lost the translation contract to a DynCorp International Inc. joint venture and became a subcontractor to the new team March 14.
L-3 had $1.1 billion of war revenue last year, or about 8 percent of its total, Nadol calculated. L-3 estimates Iraq- related revenue at about $1 billion last year and this year, spokeswoman Jennifer Barton said.
The Pentagon's five largest suppliers are Bethesda, Maryland-based Lockheed Martin Corp.; Chicago-based Boeing Co.; Northrop Grumman Corp. in Los Angeles; General Dynamics; and Waltham, Massachusetts-based Raytheon Co. Aside from General Dynamics, Nadol estimates they got 1 percent to 4 percent of 2007 sales from the war.
Northrop, the builder of aircraft carriers, won the least: about $300 million, or 1 percent of 2007 revenue, Nadol said.
``Northrop Grumman would be relatively unaffected by a reduction in supplemental funding for Iraq and Afghanistan or a rapid withdrawal from Iraq because our exposure to the supplemental war funding is small,'' Dan McClain, a Northrop spokesman, said in an e-mail.
To contact the reporters on this story: Edmond Lococo in Boston at elococo@bloomberg.net.
It is very true that war can be profitable for some. But it is also true that it is deadly for others. Who will win, nobody knows...
General Dynamics, Harris, L-3 Lead Gains From 5-Year Iraq War
By Edmond Lococo
March 25 (Bloomberg) -- General Dynamics Corp., Harris Corp. and L-3 Communications Holdings Inc. benefited most among the Pentagon's 25 largest military suppliers from five years of conflict in Iraq, based on a combination of war-related sales and stock gains.
General Dynamics and Harris, the Melbourne, Florida-based maker of combat radios, both tripled in stock price in the five years ended March 20, the anniversary of the war's start. L-3, which provides translators, rose 164 percent. Their gains beat the Standard & Poor's 500 Stock Index, which rose 52 percent, and the S&P Aerospace and Defense Index, which more than doubled.
The U.S. has begun reducing troops in Iraq, a process that may accelerate next year and threaten revenue of companies that gained the most from the war. Heavy combat use of vehicles and equipment still will trigger years of replacement sales. War costs are about $12 billion a month, the Pentagon said Jan. 28.
``The war has been a huge benefit to almost all contractors,'' said William Hartung, director of the arms and security initiative at the New America Foundation in New York. ``Ammunition, armor, vehicles, communications are places where there's a lot of spending now, and they will have to repair or replace much of it when the war ends.''
Congress has approved about $700 billion for conflicts in Iraq and Afghanistan since the 2001 terror attacks, the Congressional Research Service says. That's on top of the regular defense budget, which is $480 billion this year.
The U.S. is pulling five of 20 combat brigades out of Iraq through July. The pace next year may be set by the winner of November's U.S. presidential election, a showdown between presumptive Republican nominee John McCain, an Arizona senator, and either Senate colleague Barack Obama of Illinois or Hillary Clinton of New York for the Democrats.
General Dynamics
General Dynamics benefited from funding to buy and support Abrams tanks and Stryker troop transports, as well as ammunition sales. The company had about $2.35 billion in war revenue last year, the most among U.S. defense companies, based on estimates by Joseph Nadol, an analyst with JP Morgan Securities Inc. in New York. At about 9 percent of sales, it was second to Harris by percentage.
Spokesman Robert Doolittle of Falls Church, Virginia-based General Dynamics declined to confirm the data. ``We don't track orders, revenue or income based on where it's going,'' he said.
General Dynamics rose to fourth on the Pentagon's list of prime contractors in 2006, with $10.5 billion in work, from fifth in 2002 at $6.96 billion. The list excludes money received as a subcontractor. The Defense Department hasn't released 2007 data.
``General Dynamics' business would not be nearly as robust without the war,'' Cai Von Rumohr, a Boston-based analyst with Cowen & Co., said in an interview.
Harris
Harris received an estimated $600 million of war-related sales last year, or about 13 percent of its total, Nadol said. That was the largest proportion among major defense companies.
Harris became the Pentagon's 25th-largest supplier in 2006, with $1.34 billion in prime contracts, from 48th in 2002.
``There has been some benefit from Iraq, but our future is not tied to Iraq or levels of troop deployment, or whether the war is coming to an end,'' Chief Financial Officer Gary McArthur said in an interview. He said he was unable to provide a figure for how much annual revenue Harris has received from the war.
Harris makes Falcon II radios, which can be mounted in vehicles or carried by soldiers. The radios also can carry data and video as part of an upgrade program that may cost as much as $30 billion, McArthur said.
``The whole need to modernize is not dependent on levels of troops in, or not in, Iraq,'' the executive said.
Analyst Nadol has doubts. ``A combat-vehicle maker like General Dynamics is less exposed than an equipment provider such as Harris'' to a drop in revenue, he said.
L-3
New York-based L-3 benefited through its role as the largest supplier of translation services for the Army in Iraq. L-3 lost the translation contract to a DynCorp International Inc. joint venture and became a subcontractor to the new team March 14.
L-3 had $1.1 billion of war revenue last year, or about 8 percent of its total, Nadol calculated. L-3 estimates Iraq- related revenue at about $1 billion last year and this year, spokeswoman Jennifer Barton said.
The Pentagon's five largest suppliers are Bethesda, Maryland-based Lockheed Martin Corp.; Chicago-based Boeing Co.; Northrop Grumman Corp. in Los Angeles; General Dynamics; and Waltham, Massachusetts-based Raytheon Co. Aside from General Dynamics, Nadol estimates they got 1 percent to 4 percent of 2007 sales from the war.
Northrop, the builder of aircraft carriers, won the least: about $300 million, or 1 percent of 2007 revenue, Nadol said.
``Northrop Grumman would be relatively unaffected by a reduction in supplemental funding for Iraq and Afghanistan or a rapid withdrawal from Iraq because our exposure to the supplemental war funding is small,'' Dan McClain, a Northrop spokesman, said in an e-mail.
To contact the reporters on this story: Edmond Lococo in Boston at elococo@bloomberg.net.
It is very true that war can be profitable for some. But it is also true that it is deadly for others. Who will win, nobody knows...
Where is the FDIC during this credit crisis?
Little has been said about the Federal Deposit Insurance Corporation (FDIC) during this credit crisis. Bailouts, rescues, propups, thief... But what about the other side of the coin. Well I found this article and thought I would share it with you. If we can believe 10% of what we read, we are in for some deep do-do!!! Enjoy!
F.D.I.C. Prepares for Higher Bank Failures
By THE ASSOCIATED PRESS
WASHINGTON (AP) — Federal bank regulators plan to increase the size of its staff by 60 percent to handle an anticipated surge in troubled financial institutions.
The Federal Deposit Insurance Corporation wants to add 140 workers to bring staff levels to 360 workers in the division that handles bank failures, the agency’s chief operating officer, John Bovenzi, said Tuesday.
“We want to make sure that we’re prepared,” Mr. Bovenzi said, adding that most of the new employees will be temporary and based in Dallas.
There have been five bank failures since February 2007 after an uneventful stretch of more than two years. The last time the agency was hit hard with failures was in the 1990-1991 recession, when 502 banks failed in three years.
Analysts see casualties rising, but do not believe they will reach early-1990s levels.
Gerard Cassidy, managing director of bank equity research at RBC Capital Markets, projects 150 bank failures over the next three years, with the highest concentration in states like California and Florida.
To cushion against losses from bad loans, banks will probably raise additional capital and cut dividends this year, said Tony Davis, a senior bank analyst with Stifel Nicolaus. However, he said, “we’re not looking at a massive number of bank failures.”
The F.D.I.C. provides insurance for deposits up to $100,000. While depositors typically have quick access to their bank accounts on the next business day after a bank goes out of business, winding down a failed bank’s operations can take years to finish. That process can include selling real estate and investments and dealing with lawsuits.
There are 76 banks on the F.D.I.C.’s “problem institutions” list, - which would equate to about 10 expected bank failures this year, though F.D.I.C. officials declined to make projections. Historically, about six banks fail each year on average.
There have been two failures in 2008 — both involving small Missouri-based banks. By far the largest recent failure was last September, when NetBank, a Georgia-based on-line bank with $2.5 billion in assets, NetBank’s insured deposits — held by more than 100,000 customers — were assumed by ING Bank, part of the Dutch financial giant ING Groep.
F.D.I.C. officials said last month they planned to bring back about 25 retirees to the agency, adding that those workers will train new employees.
F.D.I.C. Prepares for Higher Bank Failures
By THE ASSOCIATED PRESS
WASHINGTON (AP) — Federal bank regulators plan to increase the size of its staff by 60 percent to handle an anticipated surge in troubled financial institutions.
The Federal Deposit Insurance Corporation wants to add 140 workers to bring staff levels to 360 workers in the division that handles bank failures, the agency’s chief operating officer, John Bovenzi, said Tuesday.
“We want to make sure that we’re prepared,” Mr. Bovenzi said, adding that most of the new employees will be temporary and based in Dallas.
There have been five bank failures since February 2007 after an uneventful stretch of more than two years. The last time the agency was hit hard with failures was in the 1990-1991 recession, when 502 banks failed in three years.
Analysts see casualties rising, but do not believe they will reach early-1990s levels.
Gerard Cassidy, managing director of bank equity research at RBC Capital Markets, projects 150 bank failures over the next three years, with the highest concentration in states like California and Florida.
To cushion against losses from bad loans, banks will probably raise additional capital and cut dividends this year, said Tony Davis, a senior bank analyst with Stifel Nicolaus. However, he said, “we’re not looking at a massive number of bank failures.”
The F.D.I.C. provides insurance for deposits up to $100,000. While depositors typically have quick access to their bank accounts on the next business day after a bank goes out of business, winding down a failed bank’s operations can take years to finish. That process can include selling real estate and investments and dealing with lawsuits.
There are 76 banks on the F.D.I.C.’s “problem institutions” list, - which would equate to about 10 expected bank failures this year, though F.D.I.C. officials declined to make projections. Historically, about six banks fail each year on average.
There have been two failures in 2008 — both involving small Missouri-based banks. By far the largest recent failure was last September, when NetBank, a Georgia-based on-line bank with $2.5 billion in assets, NetBank’s insured deposits — held by more than 100,000 customers — were assumed by ING Bank, part of the Dutch financial giant ING Groep.
F.D.I.C. officials said last month they planned to bring back about 25 retirees to the agency, adding that those workers will train new employees.
Tuesday, March 11, 2008
Whose money is it anyway?
This just in: the Fed is injecting liquidity into the market to the tune of $400 billion from last week until the end of the month... Whose money are they playing with? They will accept as collateral those securities backed by those worthless home loans - imagine that- securities that no one else will touch!!!
Don't believe me? Here is the article... Enjoy!!!
Fed to Lend $200 Billion, Take on Mortgage Securities (Update3)
By Scott Lanman
March 11 (Bloomberg) -- The Federal Reserve, struggling to contain a crisis of confidence in credit markets, plans to lend up to $200 billion in exchange for mortgage-backed securities.
The Fed coordinated the effort with central banks in Europe and Canada, which plan to inject up to $45 billion into their banking systems. The Fed said in a statement it will hold auctions of Treasuries in exchange for debt including AAA rated mortgage securities sold by Fannie Mae, Freddie Mac and by banks.
Today's steps indicate the Fed is increasingly concerned about the investor exodus from mortgage debt, which threatens to deepen the housing contraction and the economic slowdown. While they fall short of the calls by some analysts for the Fed to make outright purchases of mortgage debt, the central bank left the door open to expanding the effort.
``This is the most significant step the Fed has taken so far,'' said David Resler, chief economist at Nomura Securities International Inc. in New York. ``This relieves some of the pressure'' in the credit markets, he said.
Today's steps are the latest in Chairman Ben S. Bernanke's effort to alleviate increasing strains in financial markets that are curtailing credit to homeowners and companies, even after the Fed lowered its main interest rate by 2.25 percentage points.
Last week, the Fed said it would make up to $200 billion available to banks in a separate initiative to help boost liquidity.
New Tool
The Fed today set up a new tool, the Term Securities Lending Facility, to lend Treasuries to primary dealers for 28- day periods through weekly auctions. The Fed also said it's increasing the amount of dollars available to European central banks through swap lines.
The Federal Open Market Committee authorized increasing currency swap lines with the European Central Bank and Swiss National Bank to $30 billion and $6 billion, respectively, increasing the ECB's line by $10 billion and the Swiss line by $2 billion. The Fed extended the swaps through Sept. 30.
The ECB announced it will lend banks in Europe up to $15 billion for 28 days and the SNB announced a similar auction of up to $6 billion. The Bank of England will offer $20 billion of three-month loans on March 18 and hold another auction on April 15. The Bank of Canada announced plans to purchase $4 billion of securities for 28 days.
Treasuries slid after the announcement, with yields on 10- year notes rising to 3.60 percent at 10:32 a.m. in New York, from 3.46 percent late yesterday.
Rate Expectations
Traders removed bets on the Fed to lower its benchmark rate by a full percentage point, to 2 percent, by the end of the next meeting on March 18, futures showed. The contracts indicate a 60 percent chance of a 0.75 percentage-point reduction.
The Fed's auctions of Treasuries, which will begin March 27, may be secured by collateral including agency and private residential mortgage-backed securities, the Fed said. The central bank ``will consult with primary dealers on technical design features'' of the new tool.
Primary dealers are a group of 20 banks and securities firms that trade Treasuries directly with the Fed Bank of New York.
To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net
Last Updated: March 11, 2008 10:33 EDT
Its crap... Pure crap... Good luck, America!!! Good luck to us all!!!
Don't believe me? Here is the article... Enjoy!!!
Fed to Lend $200 Billion, Take on Mortgage Securities (Update3)
By Scott Lanman
March 11 (Bloomberg) -- The Federal Reserve, struggling to contain a crisis of confidence in credit markets, plans to lend up to $200 billion in exchange for mortgage-backed securities.
The Fed coordinated the effort with central banks in Europe and Canada, which plan to inject up to $45 billion into their banking systems. The Fed said in a statement it will hold auctions of Treasuries in exchange for debt including AAA rated mortgage securities sold by Fannie Mae, Freddie Mac and by banks.
Today's steps indicate the Fed is increasingly concerned about the investor exodus from mortgage debt, which threatens to deepen the housing contraction and the economic slowdown. While they fall short of the calls by some analysts for the Fed to make outright purchases of mortgage debt, the central bank left the door open to expanding the effort.
``This is the most significant step the Fed has taken so far,'' said David Resler, chief economist at Nomura Securities International Inc. in New York. ``This relieves some of the pressure'' in the credit markets, he said.
Today's steps are the latest in Chairman Ben S. Bernanke's effort to alleviate increasing strains in financial markets that are curtailing credit to homeowners and companies, even after the Fed lowered its main interest rate by 2.25 percentage points.
Last week, the Fed said it would make up to $200 billion available to banks in a separate initiative to help boost liquidity.
New Tool
The Fed today set up a new tool, the Term Securities Lending Facility, to lend Treasuries to primary dealers for 28- day periods through weekly auctions. The Fed also said it's increasing the amount of dollars available to European central banks through swap lines.
The Federal Open Market Committee authorized increasing currency swap lines with the European Central Bank and Swiss National Bank to $30 billion and $6 billion, respectively, increasing the ECB's line by $10 billion and the Swiss line by $2 billion. The Fed extended the swaps through Sept. 30.
The ECB announced it will lend banks in Europe up to $15 billion for 28 days and the SNB announced a similar auction of up to $6 billion. The Bank of England will offer $20 billion of three-month loans on March 18 and hold another auction on April 15. The Bank of Canada announced plans to purchase $4 billion of securities for 28 days.
Treasuries slid after the announcement, with yields on 10- year notes rising to 3.60 percent at 10:32 a.m. in New York, from 3.46 percent late yesterday.
Rate Expectations
Traders removed bets on the Fed to lower its benchmark rate by a full percentage point, to 2 percent, by the end of the next meeting on March 18, futures showed. The contracts indicate a 60 percent chance of a 0.75 percentage-point reduction.
The Fed's auctions of Treasuries, which will begin March 27, may be secured by collateral including agency and private residential mortgage-backed securities, the Fed said. The central bank ``will consult with primary dealers on technical design features'' of the new tool.
Primary dealers are a group of 20 banks and securities firms that trade Treasuries directly with the Fed Bank of New York.
To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net
Last Updated: March 11, 2008 10:33 EDT
Its crap... Pure crap... Good luck, America!!! Good luck to us all!!!
Wednesday, February 27, 2008
Whose plan is this one - Clinton or Obama?
Okay so today was a reading day. I found this article on WSJ.com also. Clinton and Obama have been sparing over who has the best solution for Americans without health insurance. Its the whole, "my plan is better than your plan" bullsh*t. In the meantime, welcome to our reminder that 17% of americans have no health insurance. Give this one a read...
Health Insurers Address Issue Of Nixed Policies To Counter Negative Publicity, Industry Pushes Plans to Let People Appeal Cancellations
By RHONDA L. RUNDLE
February 27, 2008; Page D1
The health-insurance industry is racing to defuse a growing furor over retroactive policy cancellations that have saddled some patients with big medical bills and sparked lawsuits.
America's Health Insurance Plans, an industry group, is pushing a proposal with state regulators that would give consumers the right to appeal such policy cancellations, known as rescissions, to an external panel, whose decisions would be binding. Some insurance companies, eager for even quicker action, are preparing to roll out their own independent review programs.
The efforts, which are getting a largely positive reception from consumer groups, are emerging amid public outrage in several states against insurers that have voided policies after the beneficiaries started racking up large claims for cancer or other serious illnesses.
Last week, an arbitration judge in California awarded $9.4 million, mostly in punitive damages, to a hairdresser whose medical coverage was canceled by Health Net Inc. The insurer, which acted while the woman was undergoing treatment for breast cancer, claimed that she had falsified information about her weight and failed to mention a heart murmur. The judge ruled that Health Net's conduct was "reprehensible" and unlawful.
Such cases have cast an unflattering light on insurers' practices of investigating individuals' medical histories after they get sick. The insurers say they have the right to rescind policies when policyholders don't disclose pre-existing medical conditions that would have disqualified them from coverage, or when they misrepresent information on their policy application. The companies say they are protecting the integrity of the underwriting process and keeping coverage affordable for customers.
But some policy rescissions can seem arbitrary and unfair. Last year, the Connecticut attorney general's office investigated complaints about coverage denials by units of Assurant Inc. In one case, the company refused to pay a 34-year-old woman's bills after she was diagnosed with Hodgkin's lymphoma, according to the attorney general's office. The insurer claimed she had a pre-existing condition because during a postenrollment doctor's visit she recalled experiencing mild shortness of breath while exercising six months earlier, the office said. Under a state order, the company's decision was later reversed and the woman's claims were paid.
"The stories are heart wrenching of people who have paid their money and are relying on the care they paid for, only to have the rug suddenly pulled out from under them," said Betsy Imholz, special projects director at the nonprofit advocacy group Consumers Union.
The controversy about rescissions comes at a time when many Americans are demanding an overhaul of the U.S. health-care system. Indeed, most of the presidential candidates have proposed significant revisions aimed at reducing the ranks of the uninsured. But some critics say that the practice of unfair policy rescissions suggests that private health insurers aren't up to the task of ensuring that sick people maintain coverage.
Companies may void policies after conducting an investigation into patients' medical records, looking for evidence that they were already sick before they bought insurance. Insurance companies say rescissions are unusual, but occur most often when information emerges that a policyholder was pregnant before she bought insurance. Many consumer advocates complain that applications are confusing and that people make honest mistakes in filling them out.
America's Health Insurance Plans, the industry group, hopes its proposal will quell disputes. The group is circulating a draft bill that calls for individual states to use independent panels of health-care professionals and lawyers to review policy rescissions. Details of how the process would function haven't yet been finalized, the group said. Karen Ignagni, the industry group's president and chief executive officer, says the group plans to promote its proposal in a meeting next month with the National Association of Insurance Commissioners, a group of state regulatory officials. "We're operating on a fast track," Ms. Ignagni says.
The proposal for independent review of policy rescissions parallels one that was widely adopted in the late 1990s to resolve fights over health-plan denials for expensive medical treatments. In that appeals process, patients prevail about half of the time.
A spokeswoman for the National Association of Insurance Commissioners said its information about the industry proposal is very preliminary. She said the association first heard of the initiative on Monday when it received an invitation to attend the industry group's presentation.
In California, some big health plans are moving ahead with their own initiatives. In the wake of last week's costly arbitration ruling, Health Net said it won't cancel any more policies until it puts an external review process in place.
Jay Gellert, Health Net's chief executive, said setting up procedures for independent rescission reviews can be done "in a couple or three months." It's not difficult to find lawyers and other people who know how to do this, he said, and "the more objective it is, the better it is for us because it eliminates doubt and provides real clarity." Mr. Gellert said he would support legislation to create a single statewide process, but that could take time and he doesn't want to wait.
Blue Cross of California, a unit of WellPoint Inc., said last week it also is in the process of developing a third-party review process for rescissions. After coming under attack from politicians and others, Blue Cross recently reversed a practice of enlisting doctors to report patients' pre-existing conditions.
A Blue Cross spokeswoman said once a review process is up and running, the company plans to send "every single rescission for review to help us validate the decision."
Consumer groups say independent review could benefit many patients, whose biggest need when a policy is canceled is to get their coverage reinstated, not to file a lawsuit. "We are often viewed as having very different views from the insurance industry, but on this particular matter we think this is a step in the right direction," said Ron Pollack, executive director of Families USA, a Washington nonprofit organization.
A handful of states, including New York and Washington, haven't experienced significant problems with policy rescissions because they have "guaranteed issue" laws that require companies to sell insurance to everyone, regardless of pre-existing conditions. But the industry points to studies that show such states have higher premiums. The industry would ultimately like to see guaranteed issue married to laws that require everyone to purchase insurance, creating a larger financial pot for claims payouts.
Heh, check it out... Help is on the way... The state governments will try to help citizens who deserve more from their federal government. But after all, with a $8 trillion budget deficit and a $1 trillion war in Iraq and Afghanistan, you can't really expect the federal gov. to help out... Wake up, wake up... Stop dreaming!!
Health Insurers Address Issue Of Nixed Policies To Counter Negative Publicity, Industry Pushes Plans to Let People Appeal Cancellations
By RHONDA L. RUNDLE
February 27, 2008; Page D1
The health-insurance industry is racing to defuse a growing furor over retroactive policy cancellations that have saddled some patients with big medical bills and sparked lawsuits.
America's Health Insurance Plans, an industry group, is pushing a proposal with state regulators that would give consumers the right to appeal such policy cancellations, known as rescissions, to an external panel, whose decisions would be binding. Some insurance companies, eager for even quicker action, are preparing to roll out their own independent review programs.
The efforts, which are getting a largely positive reception from consumer groups, are emerging amid public outrage in several states against insurers that have voided policies after the beneficiaries started racking up large claims for cancer or other serious illnesses.
Last week, an arbitration judge in California awarded $9.4 million, mostly in punitive damages, to a hairdresser whose medical coverage was canceled by Health Net Inc. The insurer, which acted while the woman was undergoing treatment for breast cancer, claimed that she had falsified information about her weight and failed to mention a heart murmur. The judge ruled that Health Net's conduct was "reprehensible" and unlawful.
Such cases have cast an unflattering light on insurers' practices of investigating individuals' medical histories after they get sick. The insurers say they have the right to rescind policies when policyholders don't disclose pre-existing medical conditions that would have disqualified them from coverage, or when they misrepresent information on their policy application. The companies say they are protecting the integrity of the underwriting process and keeping coverage affordable for customers.
But some policy rescissions can seem arbitrary and unfair. Last year, the Connecticut attorney general's office investigated complaints about coverage denials by units of Assurant Inc. In one case, the company refused to pay a 34-year-old woman's bills after she was diagnosed with Hodgkin's lymphoma, according to the attorney general's office. The insurer claimed she had a pre-existing condition because during a postenrollment doctor's visit she recalled experiencing mild shortness of breath while exercising six months earlier, the office said. Under a state order, the company's decision was later reversed and the woman's claims were paid.
"The stories are heart wrenching of people who have paid their money and are relying on the care they paid for, only to have the rug suddenly pulled out from under them," said Betsy Imholz, special projects director at the nonprofit advocacy group Consumers Union.
The controversy about rescissions comes at a time when many Americans are demanding an overhaul of the U.S. health-care system. Indeed, most of the presidential candidates have proposed significant revisions aimed at reducing the ranks of the uninsured. But some critics say that the practice of unfair policy rescissions suggests that private health insurers aren't up to the task of ensuring that sick people maintain coverage.
Companies may void policies after conducting an investigation into patients' medical records, looking for evidence that they were already sick before they bought insurance. Insurance companies say rescissions are unusual, but occur most often when information emerges that a policyholder was pregnant before she bought insurance. Many consumer advocates complain that applications are confusing and that people make honest mistakes in filling them out.
America's Health Insurance Plans, the industry group, hopes its proposal will quell disputes. The group is circulating a draft bill that calls for individual states to use independent panels of health-care professionals and lawyers to review policy rescissions. Details of how the process would function haven't yet been finalized, the group said. Karen Ignagni, the industry group's president and chief executive officer, says the group plans to promote its proposal in a meeting next month with the National Association of Insurance Commissioners, a group of state regulatory officials. "We're operating on a fast track," Ms. Ignagni says.
The proposal for independent review of policy rescissions parallels one that was widely adopted in the late 1990s to resolve fights over health-plan denials for expensive medical treatments. In that appeals process, patients prevail about half of the time.
A spokeswoman for the National Association of Insurance Commissioners said its information about the industry proposal is very preliminary. She said the association first heard of the initiative on Monday when it received an invitation to attend the industry group's presentation.
In California, some big health plans are moving ahead with their own initiatives. In the wake of last week's costly arbitration ruling, Health Net said it won't cancel any more policies until it puts an external review process in place.
Jay Gellert, Health Net's chief executive, said setting up procedures for independent rescission reviews can be done "in a couple or three months." It's not difficult to find lawyers and other people who know how to do this, he said, and "the more objective it is, the better it is for us because it eliminates doubt and provides real clarity." Mr. Gellert said he would support legislation to create a single statewide process, but that could take time and he doesn't want to wait.
Blue Cross of California, a unit of WellPoint Inc., said last week it also is in the process of developing a third-party review process for rescissions. After coming under attack from politicians and others, Blue Cross recently reversed a practice of enlisting doctors to report patients' pre-existing conditions.
A Blue Cross spokeswoman said once a review process is up and running, the company plans to send "every single rescission for review to help us validate the decision."
Consumer groups say independent review could benefit many patients, whose biggest need when a policy is canceled is to get their coverage reinstated, not to file a lawsuit. "We are often viewed as having very different views from the insurance industry, but on this particular matter we think this is a step in the right direction," said Ron Pollack, executive director of Families USA, a Washington nonprofit organization.
A handful of states, including New York and Washington, haven't experienced significant problems with policy rescissions because they have "guaranteed issue" laws that require companies to sell insurance to everyone, regardless of pre-existing conditions. But the industry points to studies that show such states have higher premiums. The industry would ultimately like to see guaranteed issue married to laws that require everyone to purchase insurance, creating a larger financial pot for claims payouts.
Heh, check it out... Help is on the way... The state governments will try to help citizens who deserve more from their federal government. But after all, with a $8 trillion budget deficit and a $1 trillion war in Iraq and Afghanistan, you can't really expect the federal gov. to help out... Wake up, wake up... Stop dreaming!!
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