[Cid_Yama]

230 years ago men with the names of Jefferson, Hamilton, Madison and more pledged their "lives, wealth and sacred honor" to give us a nation. Over the last few months I have heard every possible excuse in the world as to why "we're doomed" from this or that from an economic (or physical) threat, and why nobody thinks that getting off their butts will make a difference.

I've even had a couple of dozen people I've sent tickers or other calls to direct action (letter writing, petition signing, etc) turn around and tell me they're afraid of ending up on some "list" if they make noise. People are afraid of going to Washington DC or even sending a petition or picking up the phone to call their Congressman because they'll end up on some sort of "list"?[..]

Look at the financial "earnings" this quarter. Regional banks nearly all hit their numbers from profits on the Visa IPO - which was not part of the estimates, because it wasn't known when those estimates were published. That's the mother and father of all "one time" gains but boy, you wouldn't see that featured prominently in the press release, would you? Nope!

Or how about the "Level 3" asset moves? The last two quarters have seen absolutely enormous gains in "Level 3" assets - which came from "Level 2" assets, not new production. Crooked? You decide - is it crooked accounting when a bank or other institution simply doesn't like the price its being quoted, so it stops asking and makes up a number?

Or how about all these "REO" houses that banks are sending to auction with a reserve, the reserve is not hit and they get 'em back. How are those homes "valued"? Are they counting the "value" as the high bid that they refused to accept? Hell no. Is that crooked? You decide, but keep in mind while you're thinking about it that 97% of all homes sent out to auction in California are coming back unsold!

Our government says it is (we are) $9 trillion in debt but ignores the forward liability of Social Security and Medicare, which totals, at present, $53 trillion dollars in the mother and father of all "SIV"s. Oh, and David Walker, Comptroller General of the GAO, the nation's "chief accountant" resigned in February of this year, after screaming for years about the accounting that our nation practices and what it will lead to. He was ignored. Crooked? You decide.

We have sat back while Morton Grove effectively banned firearms and the City of Chicago banned handguns. Never mind that the 2nd Amendment was given to us by those very same "balls that clank" men 230 years ago not so you can shoot some thug who is trying to invade your home, but precisely so that if the government goes so far out of the boundaries of reasonable conduct that no human should have to tolerate it, you can shoot them. If you disagree with this interpretation of The Second Amendment, by the way, I suggest that you spend a few hours reading The Federalist.

The intent of the Second Amendment really is rather clear if you bother to read the material. And don't start with "the army has more guns than I do, therefore it doesn't matter." Of course the military and police have more guns than you do! They're also better trained. So what? The purpose of the Second Amendment isn't to allow you to "go postal" against the government, it is so that you and all 299,999,999 of your neighbors in this great nation can do so all at once if it ever becomes necessary.

It is this very fact that the people can exercise the ultimate check and balance on government that will keep it from ever needing to occur. Government should be afraid of the people, not the other way around, because this is how government is forced to act within the boundaries of reason, proper conduct, and the law. But you, each and every one of you, have allowed this rampant lawlessness to go on. You're the frog put in a pot with the water slowly being heated, boiling in the pot, and you refuse to act because you're afraid.

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[Cid_Yama]

<b>Ponzi Squared</b>

I’m at the annual Hyman Minsky Conference at the Levy Institute at Bard College.
Minsky, if you do not know him, was an economist who pointed out that stability is destabilizing. Because stability breeds confidence that it will continue, it encourages people to make ever riskier investments, and to take on ever more leverage.
Minsky argued there were three levels of investment as the cycle progresses. First comes hedging, in which investments are made to reduce risk. Then comes the speculative phase, and finally the Ponzi phase, in which the investment can be justified only by the assumption that prices will keep rising, not by the expected income.
Paul McCulley of Pimco, the big bond manager, gave an interesting speech in which he said the recent subprime mortgage fiasco proceeded to a fourth level — one that he called “Ponzi-squared” — before it collapsed.
At the end, he said, the marginal subprime loan was:
No money down
No documentation of income
Initial below-market teaser interest rate
Negative amortization
That is not a loan, he said. Instead, it amounted to giving the home buyer a call option to buy the house at the current market price, coupled with a put option to sell the house back at that price.
If house prices kept rising, the “buyer” could make the small interest payments to keep the option open, and eventually sell the house. That happened for a time, and led to the conclusion by rating agencies that such borrowers were good risks.
But when prices went down, the “buyer” would suffer no loss if he exercised the put and gave the house to the lender. That is just what happened.
As Paul Simon wrote in 1975, said Mr. McCulley, the strategy became:
Drop off the key, Lee,
And set yourself free.

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[Cid_Yama]

<b>The CDO pyramid scam</b>

Take a CDO with a 50 basis point spread over US Treasures. Banks will buy credit default swaps costing them 20 basis points, but by doing so, even they seem to make less profit (50 vs. now only 30 bp spread), banks can actually book the difference in spread for the whole life of this CDO instantly, something called negative-basis trade.

If this CDO life is 10 years, banks can book the whole 10 years of phantom profits this year, even if this CDO defaults sometime in next 10 years. And I don't need to mention its implications for the bonuses of the structured product groups at Wall St firms, or hedge funds with 2/20 fee structure.

In other words, who cares whether this CDO defaults next year, let us just realize the next 10 years of bonuses today! There is a common secret at Wall St. - it doesn't matter whether a product is good or bad, the only thing matters is how you structure it. As former Secretary of the Treasury, John Connely, said to European central banks in 1970s' "It might be our currency (US dollar), but it is your problem". Same thing here. If CDO defaults, they have already bumped up the stock price, cashed out the stock options and their vested shares, collected the yearend bonuses, now it is investors' problem.

This kind of accounting manipulation can fool people for a few years, but not forever, since the well of CDOs gets sucked dry very quickly when every single firm on Wall St. has found out about this and is doing it. Any firm owning a mortgage originator has a competitive "advantage" since it guarantees the source for the well. Now you know why Stanley O'Neal at Merrill Lynch wanted to buy First Franklin (a mortgage loan originator) so badly, because for every loan First Franklin originates, Merrill Lynch executives and their structured product groups will advance 10 years of their firm's earnings and future bonuses today.

Now you understand why Wall St wants to package and collateralize everything from residential to commercial, from mortgage to credit card to auto loan. Now you also realize what is behind the major shift and increase from traditional M&A fees in the good old days to the so-called trading "profit" in recent years "earned" by investment banks.

But at the same time, this raises a lot of questions about how real are the past earnings reported by both Wall St firms and hedge funds with large CDO profits. For example, if a hedge fund manager can trade minor reduction of profit (from 50 to 30 bps) with an immediate bonus of 10 times (1 vs. 10 years) paid today, what would he choose?

He would be nuts for not using credit default swaps to "structure" his CDO holdings. If the CDO defaults next year and take his fund under the watermark, it's no a big deal. He already collected 20% money from the "profit" the year before. He can just close the fund and open another new one, raising money probably from the same sucker pool of investors. If you want to see a pyramid scheme, there is nothing more live and vivid than this.

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[Cid_Yama]

This week we are stating some very painful truths about what is unfolding. It is a story of BETRAYAL by the people who run the United States and G7. Make no mistake, I love the United States but despise the government as it embodies the definition of immorality, incompetence, greed and hubris. Government is very competent at gathering power over others and making money for the people who run it and their contributors.

Combined with the public schools which do not teach anything anymore, the government is a testament to institutionalized malfeasance on every level. Words have become MEANINGLESS to the general public as they no longer know the history of their forefathers or the definitions of the words they speak and hear. We truly have entered the time of George Orwell’s 1984 Animal Farm. It is a sorry state of affairs.

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[Cid_Yama]

<b>Bear Stearns Buy-Out... 100% Fraud</b>

On or prior to March 13, 2008, an additional request was made of the options exchanges to open more March and April put series with very low exercise prices.

These new March put options would have just five days of trading to expiration. The exchanges accommodated their requests, knowing that the intentions of the requesters were to buy puts. They indeed bought massive amounts of puts. For example the March 20 puts traded nearly 50,000 contracts (i.e. contracts to sell 5 million shares at 20). The March 15s traded 9600, the March 10s traded 13,000 and the March 5s traded 6300 all on March 14 (the first day of trading of the new March series).

The introduction of those far-out-of-the-money put series in the April and March months immediately before the crash provided a vehicle whereby extreme leverage was available to the insiders. In other words if an insider had $100,000 and he knew that Morgan would buy Bear Stearns at 2, he could make 5-10 times more on the $100,000 by buying the newly introduced March puts. This is so because the soon to expire far out-of-the-money puts were far cheaper than the July or October out-of-the-money puts. And that is why the illegal inside traders requested the exchanges to introduce the far out-of-the-moneys just days before the crash.

But this scenario has serious implications. This means that the deal was already arranged on March 10 or before. That contradicts the scenario that is promoted by SEC Chairman Cox, Fed Boss Bernanke, Bear CEO Schwartz, Jamie Dimon of J.P. Morgan (who sits on the board of directors for the New York Federal Reserve Bank) and others that false rumors undermined the confidence in Bear Stearns making the company crash, notwithstanding their adequate liquiduty days before.

I would say that the deal was arranged months before but the final terms and times were not determined until maybe March 7-8, 2008.

On March 14, 2008, the April 17.5s, the 15s, the 12.5s and the 10s traded 15,000 contracts combined. Each put gives the right to sell 100 shares. So for example, these 15,000 April puts gave the purchaser(s) the right to sell 1.5 million shares at prices between 10 and 17.5. Those purchasers expected to make profits on 1.5 million shares because they knew the deal was coming at $2.00.

That is the only plausible explanation for anyone to buy puts with five days of life remaining with strike prices far below the maket price.

So there were requests, during the period of March 10-13, to the exchanges to open the March and April series for buying massive amounts of extremely out-of-the-money puts, which were accommodated by the options exchanges. Did the Exchanges aid and abet the insider trading scheme?

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[Keith_McClary]

[url=http://www.blacklistednews.com/view.asp?ID=6327]
Huge Derivative Losses[/url]

[Cid_Yama]

<b>Your Money is Gone</b>

Banks are required to hold reserves(have money set aside) to back up their obligations(including your deposits, your retirement account, etc.).

Required non-borrowed reserves(the amount kept in the vault, so to speak) is around 40 billion.

Actual amount on hand, -62 billion, yes, that's right, negative. As in the vault is empty except for an I.O.U. to the Fed for 62 Billion Dollars.(and trillions in bad debt they've been trying to keep off the books.)

The Banks are bankrupt. The Fed doesn't dare close them down. There is nothing to replace them with, as all the Banks are in the same boat.

But in the end, it will not be the Fed's choice. The Fed had 800 billion in reserves, but half of that is gone now and it hasn't fixed anything. They have been creating money out of thin air, and that has cut the value of the money in your pocket in half.(Of course your wages have not doubled, so your buying power has been cut in half.)

The Fed has no chance of fixing this. Soon, their reserves will be gone and the US Dollar will be worthless. The Banks will go belly-up, and eventually, everyone will catch on that their life-savings, their pensions, their 401Ks, their investments, their checking accounts, their savings accounts, everything is gone, all gone.

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[Ainan]

http://news.bbc.co.uk/1/hi/business/7369452.stm

Somehow the rich are still getting richer, you would think they would be loosing money...

What have you done with your savings Cid? I've put mine in two accounts at different banks, considering putting some into physical silver.

[Cid_Yama]

Did major construction on my property in preparation. underground dwelling and warehouse, solar panels, well, back-ups for everything. Off the grid, everything paid off, so no debt. Even paid forward estimated property taxes. Just stocking up now for the next 20 years. Haven't been invested since Worldcom. Anything not physically held is mearly a 'promise to pay'. Only keep enough passing through my bank account to cover transactions. Amazing how much stuff a person uses over 20 years.

[Cid_Yama]

It occurred to me last night, after contemplating a seasonally ice-free arctic, especially since the north pole is currently under only seasonal ice THIS winter and with the clearing of all the old flows to the Atlantic, Churchill is set to become THE major northern port. Being at the head of a rail line leading to the heart of North America, we are looking at a boom coming like San Francisco in the 19th Century. For the younger person looking to relocate, and ready to invest, what an awesome opportunity. I wish I was 30 or 40 years younger.

"The Port of Churchill in Churchill, Manitoba, Canada is a port on the Arctic Ocean. It was once owned by the Government of Canada but was sold to the American company OmniTRAX to run privately.

The port has four deep-sea berths for the loading and unloading of grain, bulk commodities, general cargo, and tanker vessels. The port is connected to the Hudson Bay Railway, an affiliated company of OmniTRAX. Further connections are made with the Canadian National Railway system.

<b>On October 18, 2007 the port received its first inbound shipment in seven years and the first ever from Russia</b>, a shipment of fertilizer purchased by Farmers of North America. Typically, the port is used for outgoing shipments of grain, usually from the Canadian Wheat Board.[1] <b>The shipment from Russia is supposed to be the beginning of an Arctic Bridge that would link Churchill with the Russian port of Murmansk</b>.

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[Cid_Yama]

Churchill, Manitoba, and Murmansk, on the Russian Arctic coast, are unlikely sister cities.

Churchill is not a city at all, but a barren outpost of 1,100 people on the western shore of Hudson Bay. It survives on the 15,000 tourists who visit each year for the chance to see and photograph migrating polar bears.

Murmansk, by contrast, has a population of 325,000, making it the biggest city inside the Arctic Circle. Founded in 1916 as Romanov-on-Murman, just before the revolution wiped out the Romanovs, it is a place of stolidly attractive old buildings, newer high-rises, wide boulevards and green parks. Though it lies north of Churchill, which is ice-bound up to eight months a year, Murmansk's harbor is kept free of ice by the Gulf Stream, the ideal base for the Russian Arctic fleet and commercial shipping.

One thing the communities have in common, however, is hard times. Churchill, never much to begin with, lost most of its population when Canada finished phasing out the Fort Churchill military base in the 1980's. Murmansk, like much of the rest of Russia, lost economic ground with the collapse of the Soviet Union. But the more relevant connection is an accident of geography and a shared dream: that the thawing of the Arctic Ocean would help create the so-called Arctic Bridge, a shipping route with their ports as the logical terminals.

The advantage of maritime shortcuts across the top of the world can be startling. For example, shipments from Murmansk to midcontinental North America by the well-worn route through the St. Lawrence Seaway and Great Lakes to Thunder Bay, in western Ontario, typically take 17 days. The voyage from Murmansk to Churchill is only 8 days under good conditions, and from Churchill, rail links snake down through Manitoba, the American Midwest and points south all the way to Monterrey, Mexico.

We're gearing up for the future," said Mr. Lemieux, the Manitoba transportation minister. "We look to be the gateway, the logistical hub of the world for circumpolar navigation."

A lucky winner would be Pat Broe, the American who bought the Port of Churchill in 1997 almost as an afterthought, for a token $10 Canadian. Looking to expand his railroad company, OmniTrax, he had already paid $11 million for 810 miles of denationalized tracks in Manitoba. He acquired the port at auction, figuring he would rather own it than have someone else use it as a "toll booth" for his railroad.

Since his acquisitions, OmniTrax estimates it has spent $50 million modernizing the port to accommodate big ships carrying exports like grain and farm machinery to Murmansk, and incoming Russian products, including fertilizer and steel. By some hopeful estimates, Churchill's shipping season could eventually grow to 8 or even 10 months a year, compared with the current 4.

Michael J. Ogborn, OmniTrax's managing director, said he could see a future for Churchill when "the activity at the port will be as busy as an anthill, with machines, people, freight and ships at dock."

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[Subjectivist]

Churchill, Manitoba, and Murmansk, on the Russian Arctic coast, are unlikely sister cities.

Churchill is not a city at all, but a barren outpost of 1,100 people on the western shore of Hudson Bay. It survives on the 15,000 tourists who visit each year for the chance to see and photograph migrating polar bears.

Murmansk, by contrast, has a population of 325,000, making it the biggest city inside the Arctic Circle. Founded in 1916 as Romanov-on-Murman, just before the revolution wiped out the Romanovs, it is a place of stolidly attractive old buildings, newer high-rises, wide boulevards and green parks. Though it lies north of Churchill, which is ice-bound up to eight months a year, Murmansk's harbor is kept free of ice by the Gulf Stream, the ideal base for the Russian Arctic fleet and commercial shipping.

One thing the communities have in common, however, is hard times. Churchill, never much to begin with, lost most of its population when Canada finished phasing out the Fort Churchill military base in the 1980's. Murmansk, like much of the rest of Russia, lost economic ground with the collapse of the Soviet Union. But the more relevant connection is an accident of geography and a shared dream: that the thawing of the Arctic Ocean would help create the so-called Arctic Bridge, a shipping route with their ports as the logical terminals.

The advantage of maritime shortcuts across the top of the world can be startling. For example, shipments from Murmansk to midcontinental North America by the well-worn route through the St. Lawrence Seaway and Great Lakes to Thunder Bay, in western Ontario, typically take 17 days. The voyage from Murmansk to Churchill is only 8 days under good conditions, and from Churchill, rail links snake down through Manitoba, the American Midwest and points south all the way to Monterrey, Mexico.

We're gearing up for the future," said Mr. Lemieux, the Manitoba transportation minister. "We look to be the gateway, the logistical hub of the world for circumpolar navigation."

A lucky winner would be Pat Broe, the American who bought the Port of Churchill in 1997 almost as an afterthought, for a token $10 Canadian. Looking to expand his railroad company, OmniTrax, he had already paid $11 million for 810 miles of denationalized tracks in Manitoba. He acquired the port at auction, figuring he would rather own it than have someone else use it as a "toll booth" for his railroad.

Since his acquisitions, OmniTrax estimates it has spent $50 million modernizing the port to accommodate big ships carrying exports like grain and farm machinery to Murmansk, and incoming Russian products, including fertilizer and steel. By some hopeful estimates, Churchill's shipping season could eventually grow to 8 or even 10 months a year, compared with the current 4.

Michael J. Ogborn, OmniTrax's managing director, said he could see a future for Churchill when "the activity at the port will be as busy as an anthill, with machines, people, freight and ships at dock."

link

This was the only thing I could find about Churchill Manitoba as an arctic port so I am putting this here.

The first ship of what’s hoped to be a record-breaking year was loading wheat at Manitoba’s Port of Churchill starting Tuesday.

The M.V. Ikan Suji began taking on 32,500 tonnes of No. 2 Canada Western Red Spring (CWRS) wheat sold by Richardson International and destined for Mexico.

Merv Tweed, president of OmniTrax Canada, which owns the port and the Hudson Bay Railway that serves it, said it hopes to ship 800,000 tonnes this season, up from 640,000 last year. “The way it’s situated now I think we will get very close to that number.”

The Hudson Bay grain port’s all-time record handle was 729,000 tonnes, set in 1977.

Almost 556,000 tonnes of the grain shipped through Churchill this year will receive a $9 a tonne subsidy, introduced when the Canadian Wheat Board lost its monopoly in 2012.

The subsidy will be available for two more years after this one, during which time the port hopes to win over grain exporters to Churchill’s advantages, Tweed said.

Offsetting Churchill’s geographic advantage for shippers in the middle of North America is the port’s short, three-month shipping season, but Tweed said climate change has stretched it to four months, from mid-July to mid-November.

The problem is convincing shipping companies and their insurers, he added. “We think the first shipping date should hinge on the conditions and not the historical data.”

Richardson International CEO Curt Vossen said the Winnipeg company remains committed to the port.

“With record crops and the capacity challenges we are facing each year, we are making use of all available rail and port terminal capacity to move farmers’ grain as quickly as possible.”

http://www.agcanada.com/daily/churchill ... rd-exports

[dolanbaker]

http://www.bbc.com/news/business-30150849
In an attempt to boost growth, China will cut its one year deposit rate to 2.75% from 3.0%, and trim its one-year lending rate to 5.6% from 6%.

Sentiment among investors was also boosted by comments from Mario Draghi, the head of the European Central Bank (ECB).

Mr Draghi said the ECB was ready "step up the pressure" and take more measures to try to boost growth in the eurozone.

The ECB has already cut its benchmark interest rate to 0.05% and begun some asset purchases, but Mr Draghi said the bank could alter "the size, pace and composition of our purchases".

Looks like growth is still the only game in town, and it will be pushed at all costs.

[Keith_McClary]

https://en.wikipedia.org/wiki/Arctic_Bridge