@tincup said:
If I recall, (but don't remember for sure without doing some more looking into it), even though Citigroup paid the FRBNY $50 million, it was to 'release' Citigroup from an agreement they had made, which saved them (Citigroup) a lot of money that they still owed. In other words, a 'sweetheart' deal, and some in the public were not too happy about that.
No, it was an administrative fee. The big $$$ were from the Citibank preferred and common shares.
Citibank got a total of $45 BB. The government made about $13 BB. Meanwhile, Citibank common stock for the shareholders is less than 1/10th the 2007 price.
Some "bailout" !!
Meanwhile, unions and S&L politicians are being bailed out with NO responsibility for their fiscal mismanagement in part because people are focused on non-existend Wall Street bailouts.
@jmski52 said:
Off the top of my head, it was Goldman Sachs who was indirectly bailed out in 2008 when a division of AIG was going belly-up and was bailed out so that Goldman could be made whole. Otherwise, they'd have been in serious financial trouble.
Uh, no they wouldn't. AIG had the assets to pay it off 100 cents on the dollar but not at that time because everything froze up. It was a $12 BB payment and GS would have gotten about $6-$8 BB.
Their equity capital was about $50 BB so a $4-$6 BB hit is just a scratch. Particularly after TARP $$$.;
People who think the Wall Street banks were in trouble simply can't read a balance sheet. I see these jokers all the time and they are just regurgitating slop they read on the Internet.
I owned GS bonds so I was watching GS balance sheet and stock price every few minutes (!) for DAYS. Trust me, if they had "serious finanacial trouble" my team and I would have dumped the bonds pronto (like with Lehman Brothers).
Meanwhile, unions and S&L politicians are being bailed out with NO responsibility for their fiscal mismanagement in part because people are focused on non-existend Wall Street bailouts.
this is because most Americans (who are also heavily in debt) do not understand the meaning of "fiscal management." Majority of the remaining Americans realize their choices in these politicians means little to nothing.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
The Fed is the most transparent institution we have. Exactly what don't you know about ?
How much gold and silver is actually in the vault would be a good starting point. A thorough and truly independent audit is needed.
FED meetings are in reality corporate board meetings. What comes out from behind the closed (non-transparent) door is simply what they and their counterparts in public office think we should believe. Being the financier of congress's unlimited need for stupid money protects them from actual and effective congressional oversight.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
I owned GS bonds so I was watching GS balance sheet and stock price every few minutes (!) for DAYS. Trust me, if they had "serious finanacial trouble" my team and I would have dumped the bonds pronto (like with Lehman Brothers).
Apparently, you don't know what you don't know, to wit:
FOR IMMEDIATE RELEASE
Thursday, September 20, 2018
Contact: Nick Jacobs, 202-618-6430 or njacobs@bettermarkets.com
Email shows Goldman admitted it was “toast” and only survived due to government bailouts
Washington, D.C. – On the tenth anniversary of Morgan Stanley and Goldman Sachs failing on Friday, September 20, 2008, Dennis Kelleher, President and CEO of Better Markets, issued the following statement:
“Goldman Sachs has relentlessly tried to rewrite the history of the 2008 crash, pretending that it was never at risk of failure. That is simply false. As proved by an email from ten years ago (reproduced below), Goldman Sachs was ‘toast’ and would have gone bankrupt but for being bailed out by the United States government and taxpayers. Those bailouts saved the bank and the jobs, status and wealth of all the Goldman bankers. For example, the astronomical wealth of CEO Lloyd Blankfein, former President Gary Cohn and all the other Goldman partners only exists today because they were bailed out. Just like the shareholders in bankrupt Lehman Brothers, their stock and options would have been worthless, including the recently reported $3 billion ‘Goldman partners’ haul on crisis-era options.
“We know this because, ten years ago today, just five days after Lehman Brothers filed for bankruptcy, four days after the $85 billion bailout of AIG, and days after Treasury Secretary Paulson effectively nationalized the $3.7 trillion money market industry via a guaranty program, Morgan Stanley called New York Fed President Tim Geithner to inform him that it would not be able to open its doors on Monday and Goldman admitted that, if that happened, it was ‘toast,’ as reflect in an internal Fed email (reproduced below).
“While many are remembering the 10th anniversary of the collapse of Lehman Brothers and the onset of the worse financial crash since 1929, there is too much spin, self-congratulation and omission or denial of the actual facts. As we have detailed, the crash had many causes, but a big one was the reckless and illegal activities of Wall Street’s too-big-to-fail firms, which were nonetheless bailed out without any accountability. On this 10th anniversary, it is important to remember that Goldman Sachs and the other too-big-to-fail financial firms only exist today due to the generosity and decisive role of the U.S. government and taxpayers in stopping the crisis and saving those Wall Street giants with trillions of dollars in bailouts. False narratives, forgetting or ignoring those facts and so many others may be comforting to those on Wall Street and their allies, but it blinds them to what is happening in the country and why.”
This email was from Michael Silva who was the chief of staff and senior vice president for the Executive Group at the New York Fed, and relates to a phone call from Morgan Stanley (MS) to Timothy F. Geithner (TFG), then President of the Federal Reserve Bank of New York, about it and Goldman Sachs (GS).
Q: Are You Printing Money? Bernanke: Not Literally
@psuman08 said:
I don't think this is possible in the global economy. I think what we need is to bring transparency to the FED.
The Fed is the most transparent institution we have. Exactly what don't you know about?
What is the data they are using? Powell all but admitted that the government data they have been using is not accurate (jobs numbers and the constant corrections). Are inflation numbers that are massaged to eliminate basic necessities what we should be using?
What is more important, employment or inflation? We have heard both. I am not saying this is not a difficult tap-dance, but what if we knew what the Fed's acceptable unemployment number is, modeling is easier. Economists that I have seen guess between 4 and 4.5% - and what job numbers are you using? The BS numbers that have been released all year and corrected by 900K at this point? Regarding inflation, they say 2% inflation is the goal, but we also know that is BS based on their recent rate cuts. Again, I realize this is tough when Yellen is stabbing you in the back with her policies. Maybe a little transparency that the Fed's hands are tied regarding inflation when the Treasury and government spending is working against them. If they are truly independent (lol) he could speak freely and be transparent
GF, I normally agree with your posts, but being the "most transparent institution" is like being the best looking in an ugly contest.
@jmski52 said:
This email was from Michael Silva who was the chief of staff and senior vice president for the Executive Group at the New York Fed, and relates to a phone call from Morgan Stanley (MS) to Timothy F. Geithner (TFG), then President of the Federal Reserve Bank of New York, about it and Goldman Sachs (GS).
Dennis Kelleher is a financial doofus. Goldman Sachs paid back the TARP $$$ within 9 months. I don't think a bank that was "toast" would have been able to pay back that loan WITHOUT diluting their shareholders as was done by Citibank. Kelleher can't read a balance sheet and is very quiet on how a $4 BB hit imperils a bank with $50 BB in equity capital.
But he sure remained quiet when the Teamsters Pension Plan, the UAW, and Detroit penisoners were bailed out with free money that will NEVER be paid back.
1 more thing: both Goldman and JP Morgan asked to NOT receive TARP $$$. Doesn't sound like they really needed the money, huh ? They were forced at gunpoint to take the TARP $$$ so as not to "stigmatize" other more needy TARP recipients.
@psuman08 said:
GF, I normally agree with your posts, but being the "most transparent institution" is like being the best looking in an ugly contest.
There's a difference between TRANSPARENCY and ACCURACY. You are correct that there are big changes in data, revisions, benchmark revisions, etc. But the Fed deals with the information that it has at that moment. In that respect, they do the best they can with the information they have AT THAT TIME.
Have you seen the press conferences like last week's after the FOMC meets to decide on Fed policy ? Jay Powell speaks about what the Fed is up to....and then....he takes Q&A for 45 minutes from the press who can ask him ANYTHING about the economy.
You think politicians do that with spending, entitlements, etc. ? No way.
It's ridiculous that the Fed -- which made the government about $500 BB in "profits" the last 10-12 years -- gets attacked by folks who have no better plan for a monetary system. The profit center gets attacked...the cost centers get a free pass.
It's ridiculous that the Fed -- which made the government about $500 BB in "profits" the last 10-12 years -- gets attacked by folks who have no better plan for a monetary system. The profit center gets attacked...the cost centers get a free pass.
We middle class folks attack the FED because they are enriching the top 10% at our expense. Their modern management of our economy is designed for this result and they have been 100% successful.
Defenders of our central bank are normally those that profit in some way at the expense of the innocent outsiders. The economy is not a "market," it is a specific money movement system that is forced on everyone. It should be designed and operated in a way that does not take from some to enrich others. Such enrichment should be limited to valid markets that are tightly regulated. I am a strong supporter of maximum employment and stable prices and the FED should be limited to this mandate. After all, theses are the limitations that allowed it to be forced on us by our elected leaders.
The price of gold is the true tool for measuring the FED's ability to do it's authorized job.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
" No, it was an administrative fee. The big $$$ were from the Citibank preferred and common shares. "
It can be called whatever..... it still released Citigroup from the agreement they had entered into and were bound by.. and the release was to their advantage (Citigroup).
A bailout is still a bailout. You had made a statement to the effect that the FED does NOT bail out banks. I think the examples given appear to disprove that assertion.
@tincup said:
" No, it was an administrative fee. The big $$$ were from the Citibank preferred and common shares. "
It can be called whatever..... it still released Citigroup from the agreement they had entered into and were bound >by.. and the release was to their advantage (Citigroup).
A bailout is still a bailout. You had made a statement to the effect that the FED does NOT bail out banks. I think the examples given appear to disprove that assertion.
Really ? So the shareholders were "bailed out" and are sitting with a 90% loss ? How come "bailouts" for politically connnected special interest groups don't include a 90% haircut ?
I'm sorry, but "bailout" to me means you got money you weren't entitled to. Since some banks didn't even WANT the TARP $$$ and others got diluted to hell, it seems asinine to me to say the banks got "bailed out." Since the Treasury made $$$ on the policy, no bailout took place.
Explain the advantage in having your shareholders diluted 90% ? Have you punched up a long-term chart of Citibank ? The release was NOT to Citibank's advantage, it was an administrative detail. You think Citibank was going to be part of the U.S. Treasury for years and decades ?
@tincup said:
" No, it was an administrative fee. The big $$$ were from the Citibank preferred and common shares. "
It can be called whatever..... it still released Citigroup from the agreement they had entered into and were bound >by.. and the release was to their advantage (Citigroup).
A bailout is still a bailout. You had made a statement to the effect that the FED does NOT bail out banks. I think the examples given appear to disprove that assertion.
Really ? So the shareholders were "bailed out" and are sitting with a 90% loss ? How come "bailouts" for politically connnected special interest groups don't include a 90% haircut ?
I'm sorry, but "bailout" to me means you got money you weren't entitled to. Since some banks didn't even WANT the TARP $$$ and others got diluted to hell, it seems asinine to me to say the banks got "bailed out." Since the Treasury made $$$ on the policy, no bailout took place.
Explain the advantage in having your shareholders diluted 90% ? Have you punched up a long-term chart of Citibank ? The release was NOT to Citibank's advantage, it was an administrative detail. You think Citibank was going to be part of the U.S. Treasury for years and decades ?
.
The intent of the bailout was not to help shareholders. Citibank made bad choices. They also engaged in unethical dealings. And they made a lot of money that they weren't really entitled to. Their shareholders deserved what they got (although bank management did not get what they deserved). The interconnected incestuous relationship between the FED and the banks could not allow the Citibank domino to fall. So Citibank was supported (yes, bailed out) to the extent necessary to keep it from toppling over into the next domino.
Those bailouts saved the bank and the jobs, status and wealth of all the Goldman bankers. For example, the astronomical wealth of CEO Lloyd Blankfein, former President Gary Cohn and all the other Goldman partners only exists today because they were bailed out. Just like the shareholders in bankrupt Lehman Brothers, their stock and options would have been worthless, including the recently reported $3 billion ‘Goldman partners’ haul on crisis-era options.
Q: Are You Printing Money? Bernanke: Not Literally
The initial 2008-09 bailouts may have enriched banks/bankers but it did save the banking industry and therefore the common folk who depend on it. Destruction of a national economy leads to destruction of the nation that hosts it. Problem lies in once FED/Treas. Dept. learned they could print endless amounts of money without blowing up the economy they continued to do so carelessly ever since then (various forms of QE) at the expense of higher inflation. Since this magic money tree (MMT) tool continues to be at their disposal they have become more careless in their oversight of the economy. They now have this escape hatch from their mismanagement.
True definition of economic inflation is an increase in the money supply. The result is higher price inflation.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
@derryb said:
The initial 2008-09 bailouts may have enriched banks/bankers but it did save the banking industry and therefore the common folk who depend on it.
@derryb said:
The initial 2008-09 bailouts may have enriched banks/bankers but it did save the banking industry and therefore the common folk who depend on it.
Yes, success and failure are to be shared.
Banks/bankers got bonuses while the common folk got higher prices. Sharing? LOL
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
@derryb said:
The initial 2008-09 bailouts may have enriched banks/bankers but it did save the banking industry and therefore the common folk who depend on it.
Yes, success and failure are to be shared.
Banks/bankers got bonuses while the common folk got higher prices. Sharing? LOL
There was some Muppet band with a song called "The Song Remains the Same" Expect MUCH MORE of the same. RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
@derryb said:
The initial 2008-09 bailouts may have enriched banks/bankers but it did save the banking industry and therefore the common folk who depend on it. Destruction of a national economy leads to destruction of the nation that hosts it. Problem lies in once FED/Treas. Dept. learned they could print endless amounts of money without blowing up the economy they continued to do so carelessly ever since then (various forms of QE) at the expense of higher inflation. Since this magic money tree (MMT) tool continues to be at their disposal they have become more careless in their oversight of the economy. They now have this escape hatch from their mismanagement.
The problem is they've essentially removed the consequence of pain from bad decisions. If I thought I was immortal, I would live my life differently than I do today. But it's the threat of pain and death that keep me from making decisions with bad health implications. Once you've removed the ultimate penalty of bankruptcy, liquidation, and failure, banks and others are encouraged to act with reckless abandon. Is that preferable? Perhaps if the safety net wasn't there we wouldn't get into these predicaments or they wouldn't be as bad.
@dcarr said:
The intent of the bailout was not to help shareholders. Citibank made bad choices. They also engaged in unethical dealings. And they made a lot of money that they weren't really entitled to. Their shareholders deserved what they got (although bank management did not get what they deserved). The interconnected incestuous relationship between the FED and the banks could not allow the Citibank domino to fall. So Citibank was supported (yes, bailed out) to the extent necessary to keep it from toppling over into the next domino.
But the bank wasn't in need of a "bailout." Banks run into temporary liquidity issues because of the nature of banking. It's the nature of fractional reserve banking.
They didn't engage in unethical dealings -- unless you mean making no-down and low-down mortgages to PC-groups mandated by HUD, Fannie, FHA, and Freddie. The government -- NOT the Fed -- wanted those mortgages made....the Fed (Greenspan) was lobbying to END the policy and the POLITICIANS and GSEs fought it tooth and nail. I know -- I hosted these lobbyists for my trade group.
Sorry, but being diluted 90% is not being "bailed out." It's in the governments best interests to support banks rather than have to create new ones...pawn the assets off on other banks.....or have the govt run them.
@jmski52 said:
Never forget.
Those bailouts saved the bank and the jobs, status and wealth of all the Goldman bankers. For example, the astronomical wealth of CEO Lloyd Blankfein, former President Gary Cohn and all the other Goldman partners only exists today because they were bailed out. Just like the shareholders in bankrupt Lehman Brothers, their stock and options would have been worthless, including the recently reported $3 billion ‘Goldman partners’ haul on crisis-era options.
You must have forgot.
The wealth of the Goldman partners was NEVER in doubt because the equity capital never dipped below $50 BB. I know -- I was tracking it minute-by-minute in September and October 2008.
Lehman Brothers CEO Dick Fuld lost $700,000,000 in stock, RSUs, and options. Your source clearly wasn't tracking the crisis, this was known by September 16th. Goldman and JP Morgan shares bottomed 3 trading days later; Citibank 5-6 days later.
All of the people you guys quote are financial liars and ignoramuses. They have nothing to say about REAL bailouts because those bailouts benefit their political interests (i.e., members of a certain political party, unions).
$2 trillion is unfunded in pensions/OPEBs for S&L govts. and not a peep from the same frauds who use ERISA to mandate companies fund corporate benefits (except when it leads to union layoffs, then forebearances are given).
The government MADE $$$ on TARP. The "bailout" made them money. But the "bailout" for certain politically-connected groups will NOT make the taxpayers $$$. $36,000,000,000 went down the tubes bailing out the Teamsters CSPF and nobody is talking about it because "Wall Street greed" is a better narrative -- if false -- than "union and political party slush fund" used to siphon off retiree benefits.
Wall Street is for The Rich. Unions are for The Little Guy. I know -- I heard it on CNN. And MSNBC. And ABC. And CBS. And ABC.
@ProofCollection said: @derryb said:
The initial 2008-09 bailouts may have enriched banks/bankers but it did save the banking industry and therefore the common folk who depend on it. Destruction of a national economy leads to destruction of the nation that hosts it. Problem lies in once FED/Treas. Dept. learned they could print endless amounts of money without blowing up the economy they continued to do so carelessly ever since then (various forms of QE) at the expense of higher inflation. Since this magic money tree (MMT) tool continues to be at their disposal they have become more careless in their oversight of the economy. They now have this escape hatch from their mismanagement.
Nonsense....when the government declared a Bank Holiday in 1933, did it "bail out" millions of American's deposits ? Maybe the average American should have gotten daily or weekly balance sheets on their banks sent by Western Union to make sure they put their money in safe banks ?
I'm assuming they didn't have internet or Bloomberg access in 1933 which would have made that moot !!
The problem is they've essentially removed the consequence of pain from bad decisions. If I thought I was immortal, I would live my life differently than I do today. But it's the threat of pain and death that keep me from making decisions with bad health implications. Once you've removed the ultimate penalty of bankruptcy, liquidation, and failure, banks and others are encouraged to act with reckless abandon. Is that preferable? Perhaps if the safety net wasn't there we wouldn't get into these predicaments or they wouldn't be as bad.
While I think tighter controls could be implemented to tie executive pay to stock price performance....and while I think CEO pay is partly disconnected to shareholder performance...to say that banks are immune from bad decisions is prepestorous. That's what the media elite -- mostly financial ignoramuses -- want you to think:
Citibank's stock price is still down 90% from 2007 because of dilution.
JPM and GS were forced to take TARP $$$ -- even though they didn't want the $$$ (no bailout needed) -- and suffered dilution (i.e., their share price and earnings fell 3-5% to account for the unnecessary preferred stock they issued at a high coupon to the Treasury TARP program). In other words....JPM and GS were BAILING OUT the U.S. Treasury. Didn't hear that from ABC or CNN ? I guess they don't employ any MBAs or CFAs.
Most of the banks that lost $$$ were small politically-connected banks.
Other TARP losers were the auto unions (bailed out for votes in Michigan).
Overall...the Treasury made $$$ on TARP because of Wall Street banks (big gains) offsetting special interest groups that escaped scrutiny (small banks, no-doc/low-doc lenders, auto companies, unions).
It's a lot easier to cry about "Wall Street bailouts" then tell the truth about REAL bailouts, PC. Unless you track the markets closely like maybe 5-10% of the country does, it will escape your attention. We saw this in the 1970's when we had gasoline lines NOT because of bad OPEC countries but because of price controls put in place by politicians. If you need proof on the bailout nonsense, ask yourself how many news stories you have seen on the $36 billion bailout of the Teamsters CSPF Pension Plan, which will cost the taxpayers far more than TARP made.
My guess is you didn't see a single story on that ERISA and SEC/IRS/DOL fraud and abomoniation by government bureaucrats who are more worried about hedge funds cheating other hedge funds with questionable information than outright fraud by those who say they are out to look after "The Working Man."
@dcarr said:
The intent of the bailout was not to help shareholders. Citibank made bad choices. They also engaged in unethical dealings. And they made a lot of money that they weren't really entitled to. Their shareholders deserved what they got (although bank management did not get what they deserved). The interconnected incestuous relationship between the FED and the banks could not allow the Citibank domino to fall. So Citibank was supported (yes, bailed out) to the extent necessary to keep it from toppling over into the next domino.
But the bank wasn't in need of a "bailout." Banks run into temporary liquidity issues because of the nature of banking. It's the nature of fractional reserve banking.
They didn't engage in unethical dealings -- unless you mean making no-down and low-down mortgages to PC-groups mandated by HUD, Fannie, FHA, and Freddie. The government -- NOT the Fed -- wanted those mortgages made....the Fed (Greenspan) was lobbying to END the policy and the POLITICIANS and GSEs fought it tooth and nail. I know -- I hosted these lobbyists for my trade group.
Sorry, but being diluted 90% is not being "bailed out." It's in the governments best interests to support banks rather than have to create new ones...pawn the assets off on other banks.....or have the govt run them.
.
Citibank was not forced to make low-equity, no-equity, and negative-equity home loans.
The entire system needed a bailout to keep it from collapsing into the "abyss". Citibank was on the edge of it. Citibank's stock declined significantly, but intervention prevented the bank from total failure.
Citibank most certainly did engage in unethical business dealings.
In 2007 they convinced the dolts on the board of the Denver Public School system to buy into Citibank's offering of interest rate swaps. Citibank knew it was a total crap deal for DPS, but the bank didn't care. They took DPS for $275 million. The students suffered. But even worse, the City & County of Denver decided the best way to pay for the bad deal was to jack up property taxes. So Denver property owners ended up paying.
@derryb said:
The initial 2008-09 bailouts may have enriched banks/bankers but it did save the banking industry and therefore the common folk who depend on it.
Yes, success and failure are to be shared.
Banks/bankers got bonuses while the common folk got higher prices. Sharing? LOL
Yes, higher prices in their 401ks, homes, and coin collections.
But the bank wasn't in need of a "bailout." Banks run into temporary liquidity issues because of the nature of banking. It's the nature of fractional reserve banking.
Then they were banking with too many fractions. When banks push the envelope on fractional lending they becoming vulnerable. This is their decision, they should suffer the consequences.
You make it sound like it is the fault of fractional banking. It is the banks' fault when they lend too many "fractions."
Their next, and ultimate downfall, will be too much derivative exposure.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Nonsense....when the government declared a Bank Holiday in 1933, did it "bail out" millions of American's deposits ? Maybe the average American should have gotten daily or weekly balance sheets on their banks sent by Western Union to make sure they put their money in safe banks ?
I'm assuming they didn't have internet or Bloomberg access in 1933 which would have made that moot !!
They didn't have a Magic Money Tree with an unlimited supply of paper and ink in 1933, they were tied to a gold standard.
@GoldFinger1969 said:
to say that banks are immune from bad decisions is prepestorous.
They became immune when they were thrown life rafts in 2008-09.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
No, it was in need of bankruptcy proceedings, reorganization, executive compensaton clawbacks and firings.
Banks run into temporary liquidity issues because of the nature of banking. It's the nature of fractional reserve banking.
They didn't engage in unethical dealings
Yeah, liquidity issues that require more debt being issued and more money created from thin air - resulting in more revenue flow to the bankers for doing exactly nothing to earn it. And if those loans don't work out as planned, the same people who are getting fleeced by loans created by fractional reserve money creation end up bailing out those same banks while inflation eats up their purchasing power at the same time.. That's as unethical as it can possibly be.
All of the people you guys quote are financial liars and ignoramuses.
You resort to name calling only because you disagree with their exposure of the ugly underbelly of the debt-based Federal Reserve banking system.
$2 trillion is unfunded in pensions/OPEBs for S&L govts. and not a peep from the same frauds who use ERISA to mandate companies fund corporate benefits (except when it leads to union layoffs, then forebearances are given).
You continue to deflect from criticisms of the banking system by pointing out corruption inherent in union organizations, and that is a separate issue. If you were to stop trying to deflect from the core problem of having a rigged money system, you might begin to see that most other problems have a root cause and that root cause is the Fed and their minions.
Q: Are You Printing Money? Bernanke: Not Literally
@dcarr said:
Citibank was not forced to make low-equity, no-equity, and negative-equity home loans.
They most certainly WERE and it started with Andrew Cuomo and HUD and the Clinton Administration wanting lending standards expanded for CRA purposes in 1996 and 1998.
That's what started it and anybody who follows the mortgage market knows that to be the case. You needed time after the 1994 MBS blowup to heal the markets and by 1996 and especially 1998 they were able to force lousy mortgages on the banks.
the entire system needed a bailout to keep it from collapsing into the "abyss". Citibank was on the edge of it. Citibank's stock declined significantly, but intervention prevented the bank from total failure.
They needed liquidity lines, yes. But no "bailout" happened as their shareholders paid a price. You keep using wors inappropriately and it stems from your lack of knowledge of banking and Fed policy.
Citibank most certainly did engage in unethical business dealings.
In 2007 they convinced the dolts on the board of the Denver Public School system to buy into Citibank's offering of interest rate swaps. Citibank knew it was a total crap deal for DPS, but the bank didn't care. They took DPS for $275 million. The students suffered. But even worse, the City & County of Denver decided the best way to pay for the bad deal was to jack up property taxes. So Denver property owners ended up paying.
This junk again ? Caveat Emptor. Denver thought this swap was good for THEM....Citibank gave them the risks to the downside. They ignored it.
Maybe the same idiots who invited Venezuelan gangs into their city should have read the fine print.
@jmski52 said:
You resort to name calling only because you disagree with their exposure of the ugly underbelly of the debt-based Federal Reserve banking system.
I call them ignorant because their track record in investment performance and economic predictions SUCKS. They have no credibility. They have no solutions that are practical. They are just in it for clicks and subscribers.
I saw this junk in the 1970's and 1980's.
You continue to deflect from criticisms of the banking system by pointing out corruption inherent in union organizations, and that is a separate issue. If you were to stop trying to deflect from the core problem of having a rigged money system, you might begin to see that most other problems have a root cause and that root cause is the Fed and their minions.
It's not unions per-se, although this biggie is union-related. It's that the whole "banks were bailed out" crowd -- including you guys -- say nothing about the Treasury MAKING MONEY off TARP with Wall Street banks but LOSING $$$ with smaller banks, unions, and the auto companies (UAW).
Don't tell me about a "bailout" when it's a short-term LOAN and is paid back in FULL within 9 months (JPM, GS) or 18 months (C, WFC, BAC) and there is NO PAYBACK AT ALL for pensions or OPEBs.
@dcarr said:
Citibank was not forced to make low-equity, no-equity, and negative-equity home loans.
They most certainly WERE and it started with Andrew Cuomo and HUD and the Clinton Administration wanting lending standards expanded for CRA purposes in 1996 and 1998.
That's what started it and anybody who follows the mortgage market knows that to be the case. You needed time after the 1994 MBS blowup to heal the markets and by 1996 and especially 1998 they were able to force lousy mortgages on the banks.
While what you say is true, no one forced them to make the NINJA loans (no income no job) that were common place. As a Phoenix real estate agent I know this better than anyone. The forced loans you speak of wouldn't have been nearly the problem if it weren't for everyone else being able to get a loan by lying about how much income you made. Who's decision was it to issue loans by trusting borrowers to just say how much they made? Certainly not the government.
@GoldFinger1969 said: Back to the OP of this thread....gold back to $2,670 and will probably set an ATH in December. Year-end retail demand usually hits then.
Maybe. Do you think the dollar index is going to reverse course and head down? Awfully tough to make new highs when the USD index is on a tear like this.
Dollar is not on a tear. Index is a comparison of select currencies and all the other ones are doing bad. You can put lipstick on a pig but it's still a pig.
Real measurement of a currency is what it will by for it's citizens.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
@ProofCollection said:
While what you say is true, no one forced them to make the NINJA loans (no income no job) that were common place. As a Phoenix real estate agent I know this better than anyone. The forced loans you speak of wouldn't have been nearly the problem if it weren't for everyone else being able to get a loan by lying about how much income you made. Who's decision was it to issue loans by trusting borrowers to just say how much they made? Certainly not the government.
If you want a law saying you can't get a mortgage unless you put 20% (or 10%) down.....it won't be the banks objecting, it will be the CRA folks and certain voting blocs in one particular party. If you worked in RE, PC, you know EXACTLY what I am talking about.
This isn't even a close call. As late as 2008, the leader of the Senate and the key banking guy in the House were saying Fannie and Freddie could take more risk. MORE risks !!!
You can't make this stuff up !!
@GoldFinger1969 said:
Back to the OP of this thread....**gold back to $2,670 and will probably set an ATH in December. Year-end retail >demand usually hits then.
Maybe. Do you think the dollar index is going to reverse course and head down? Awfully tough to make new highs >when the USD index is on a tear like this.
Let me be clear: my gold bullish call has nothing to do with the dollar's direction, PC. Unless the dollar SKYROCKETS, I don't think it will be a drag -- or enough of a drag to wipe out the bullish factors that push gold higher.
That said....historically we've had 7-10 year moves in the dollar....we're due for a few years of downdraft....the Fed is likely to cut, other CB's might hike or cut less....I think maybe the dollar is NEUTRAL for gold instead of being a big positive or negative.
I actually think BitCoin might be more important to track. Want to check out that 2023 gold mining supply figure, too.
@derryb said:
Dollar is not on a tear. Index is a comparison of select currencies and all the other ones are doing bad. You can put >lipstick on a pig but it's still a pig.
Real measurement of a currency is what it will by for it's citizens.
So the Dollar is the best currency....the problems are other currencies...but you still hate the dollar/the Fed/banks because the dollar doesn't buy what it did 50 or 100 years ago.
Got it.
Since Americans use the dollar and not a basket of foreign currencies or gold or BTC to pay their bills...that is all that matters.
@derryb said:
Dollar is not on a tear. Index is a comparison of select currencies and all the other ones are doing bad. You can put >lipstick on a pig but it's still a pig.
Real measurement of a currency is what it will by for it's citizens.
So the Dollar is the best currency....the problems are other currencies...but you still hate the dollar/the Fed/banks because the dollar doesn't buy what it did 50 or 100 years ago.
Got it.
Since Americans use the dollar and not a basket of foreign currencies or gold or BTC to pay their bills...that is all that matters.
no hate for the dollar, only those responsible for destroying it's purchasing power. That includes the FED that serves as the corporate board for public banks.
Also have a dislike for those who attempt to defend the currency destroyers.
And since Americans are forced to use the dollar for daily transactions it matters greatly how the dollar's purchasing power is managed. And if you don't understand correctly, loss of purchasing power affects one's quality of life.
Being the best currency in the basket does not make it a great currency, just the strongest in a basket full of weak currencies. Being the last of five people drowning does not win a prize.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
@ProofCollection said:
While what you say is true, no one forced them to make the NINJA loans (no income no job) that were common place. As a Phoenix real estate agent I know this better than anyone. The forced loans you speak of wouldn't have been nearly the problem if it weren't for everyone else being able to get a loan by lying about how much income you made. Who's decision was it to issue loans by trusting borrowers to just say how much they made? Certainly not the government.
If you want a law saying you can't get a mortgage unless you put 20% (or 10%) down.....it won't be the banks objecting, it will be the CRA folks and certain voting blocs in one particular party. If you worked in RE, PC, you know EXACTLY what I am talking about.
This isn't even a close call. As late as 2008, the leader of the Senate and the key banking guy in the House were saying Fannie and Freddie could take more risk. MORE risks !!!
I feel like you're deflecting and distracting. The liar loans propelled an increasing and overwhelming demand that pushed prices up too far too fast. That was the problem. Then the demand got instantly cutoff when suddenly the collapse happened and the liar loans went away. Then we had a precipitous decline in home prices which then becomes a bigger and bigger problem for those who have little or no equity. The banks and market can handful of "forced" government mortgage defaults with low or no down. The losses aren't that great unless or until you have housing price collapse which again was caused by the liar loans and the banks in turn lying about the quality of the underlying MBS.
@GoldFinger1969 said:
Back to the OP of this thread....**gold back to $2,670 and will probably set an ATH in December. Year-end retail >demand usually hits then.
Maybe. Do you think the dollar index is going to reverse course and head down? Awfully tough to make new highs >when the USD index is on a tear like this.
Let me be clear: my gold bullish call has nothing to do with the dollar's direction, PC. Unless the dollar SKYROCKETS, I don't think it will be a drag -- or enough of a drag to wipe out the bullish factors that push gold higher.
The unit you price in is a denominator which will always be a drag if it is increasing. If it flattens out it will be neutral, and if it declines it will be a tailwind.
That said....historically we've had 7-10 year moves in the dollar....we're due for a few years of downdraft....the Fed is likely to cut, other CB's might hike or cut less....I think maybe the dollar is NEUTRAL for gold instead of being a big positive or negative.
Again, if you're pricing gold in dollars, the dollar is the denominator (ounces of gold PER dollar) so my text above applies.
There's been and will be a huge change in the macro US Dollar currency market as the election has provided at least the perception and expectation of more fiscal responsibility and prosperity which is a 180 difference from the perception and expectation of the last few years. People and countries are or will be generally more willing to buy and hold USD and debt because of this. I wouldn't bet against the dollar in the near term.
I actually think BitCoin might be more important to track. Want to check out that 2023 gold mining supply figure, too.
As an indicator of what? BTC and crypto has been unleashed under the expectation of a change in regulations and a friendlier marketplace, coupled with the recent increase in access via ETFs & options by Wall Street. Crypto is going to surge unbelievably over the next year. Crypto is in a new period of market price discovery where it is adjusting to new levels of acceptance, access, and interest and thus I'm not sure its performance is a good indicator for much else.
As a reference point for the future, BTC is about $97800 at the moment, DXY is knocking on 107.
Liar loans were made because the government wanted them to be made. They knew what was going on. Yeah, there were some bad actors in the bad banks and entirely irresponsible firms (i.e., NovaStar) but they acted with complete knowledge and APPROVAL of state and federal regulators. I'm sure you sure this 1st-hand.
"Hey, I'm giving a $500,000 mortgage to a person who makes $35,000 a year -- aren't I great !!"
Nobody thought that housing prices would fall in nominal terms. Had never happened since data started in 1967. Even the 1980-81 and 1989-91 housing recessions didn't go negative. So in that respect, except for the Worst of the Worst, the questionable loans MIGHT have worked out if housing prices had not declined. The ratings agencies did NOT take that into their business models (probably should have, under a bearish scenario).
Remember: it wasn't the bad loans that sunk the banks, it was excessive leverage. Carlyle Capital went under in 2007 and they invested in U.S. Treasuries rated AAA -- but they had levered up 30-to-1.
Thank you FED. The harsh reality is that the devaluation of the dollar will continue until it meets the same fate as every paper currency throughout history—complete worthlessness.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
If you think we can have a Gold or Monetary Standard currency where the adustment to exogenous economic disolations is done via wages and prices, I'm sorry, you're living in a fantasyworld.
You might want baseball to be played for 20 innings with 6 outs per inning and 8 balls is a walk and 5 strikes is a strikeout. But that's not the game we are given.
@GoldFinger1969 said: Liar loans were made because the government wanted them to be made. They knew what was going on. Yeah, there were some bad actors in the bad banks and entirely irresponsible firms (i.e., NovaStar) but they acted with complete knowledge and APPROVAL of state and federal regulators. I'm sure you sure this 1st-hand.
"Hey, I'm giving a $500,000 mortgage to a person who makes $35,000 a year -- aren't I great !!"
Nobody thought that housing prices would fall in nominal terms. Had never happened since data started in 1967. Even the 1980-81 and 1989-91 housing recessions didn't go negative. So in that respect, except for the Worst of the Worst, the questionable loans MIGHT have worked out if housing prices had not declined. The ratings agencies did NOT take that into their business models (probably should have, under a bearish scenario).
Remember: it wasn't the bad loans that sunk the banks, it was excessive leverage. Carlyle Capital went under in 2007 and they invested in U.S. Treasuries rated AAA -- but they had levered up 30-to-1.
.
Citibank was not "forced" to make such loans. The Government-Sponsored Enterprises (GSEs) wanted the loans to be available. But they could not legally force Citibank or anyone else to make such loans. They could only encourage them to do so and to provide backing for them to do so. It was entirely Citibank's decision to make them. And of course, their plan was to securitize them and package them with insurance from AIG, into "Mortgage Backed Securites" (MBS) and offload them onto some suckers. AIG was happy to rake in the fees and never planned to pay out on the insurance.
@dcarr said:
Citibank was not forced to make low-equity, no-equity, and negative-equity home loans.
They most certainly WERE and it started with Andrew Cuomo and HUD and the Clinton Administration wanting lending standards expanded for CRA purposes in 1996 and 1998.
That's what started it and anybody who follows the mortgage market knows that to be the case. You needed time after the 1994 MBS blowup to heal the markets and by 1996 and especially 1998 they were able to force lousy mortgages on the banks.
the entire system needed a bailout to keep it from collapsing into the "abyss". Citibank was on the edge of it. Citibank's stock declined significantly, but intervention prevented the bank from total failure.
They needed liquidity lines, yes. But no "bailout" happened as their shareholders paid a price. You keep using wors inappropriately and it stems from your lack of knowledge of banking and Fed policy.
Citibank most certainly did engage in unethical business dealings.
In 2007 they convinced the dolts on the board of the Denver Public School system to buy into Citibank's offering of interest rate swaps. Citibank knew it was a total crap deal for DPS, but the bank didn't care. They took DPS for $275 million. The students suffered. But even worse, the City & County of Denver decided the best way to pay for the bad deal was to jack up property taxes. So Denver property owners ended up paying.
This junk again ? Caveat Emptor. Denver thought this swap was good for THEM....Citibank gave them the risks to the downside. They ignored it.
Maybe the same idiots who invited Venezuelan gangs into their city should have read the fine print.
.
Not "junk".
It was a serious matter and illustrated how much of a scammer Citibank was in that transaction.
Nothing but more deflection/distraction attempts here. Veneuelan gangs ?
@GoldFinger1969 said:
If you think we can have a Gold or Monetary Standard currency where the adustment to exogenous economic disolations is done via wages and prices, I'm sorry, you're living in a fantasyworld.
You might want baseball to be played for 20 innings with 6 outs per inning and 8 balls is a walk and 5 strikes is a strikeout. But that's not the game we are given.
Ditto for the Fed and currency.
don't need a gold standard for sound money. All we need is law that requires congress spend no more than what is in the coffers. The White House could prepare all the budgets they want, it is congress that is eager to spend all that has been allotted, even when it's not there. A balanced budget required by law should do the trick.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
@GoldFinger1969 said:
If you think we can have a Gold or Monetary Standard currency where the adustment to exogenous economic disolations is done via wages and prices, I'm sorry, you're living in a fantasyworld.
You might want baseball to be played for 20 innings with 6 outs per inning and 8 balls is a walk and 5 strikes is a strikeout. But that's not the game we are given.
Ditto for the Fed and currency.
don't need a gold standard for sound money. All we need is law that requires congress spend no more than what is in the coffers. The White House could prepare all the budgets they want, it is congress that is eager to spend all that has been allotted, even when it's not there. A balanced budget required by law should do the trick.
@GoldFinger1969 said: Liar loans were made because the government wanted them to be made. They knew what was going on. Yeah, there were some bad actors in the bad banks and entirely irresponsible firms (i.e., NovaStar) but they acted with complete knowledge and APPROVAL of state and federal regulators. I'm sure you sure this 1st-hand.
"Hey, I'm giving a $500,000 mortgage to a person who makes $35,000 a year -- aren't I great !!"
Nobody thought that housing prices would fall in nominal terms. Had never happened since data started in 1967. Even the 1980-81 and 1989-91 housing recessions didn't go negative. So in that respect, except for the Worst of the Worst, the questionable loans MIGHT have worked out if housing prices had not declined. The ratings agencies did NOT take that into their business models (probably should have, under a bearish scenario).
Remember: it wasn't the bad loans that sunk the banks, it was excessive leverage. Carlyle Capital went under in 2007 and they invested in U.S. Treasuries rated AAA -- but they had levered up 30-to-1.
.
Citibank was not "forced" to make such loans. The Government-Sponsored Enterprises (GSEs) wanted the loans to be available. But they could not legally force Citibank or anyone else to make such loans. They could only encourage them to do so and to provide backing for them to do so. It was entirely Citibank's decision to make them. And of course, their plan was to securitize them and package them with insurance from AIG, into "Mortgage Backed Securites" (MBS) and offload them onto some suckers. AIG was happy to rake in the fees and never planned to pay out on the insurance.
Not only that, but the banks lied about the quality of the loans in the MBSs. They were packaging up liar loans and passing them off as having qualified buyers. So while the government encouraged it, the banks lied about the quality of the mortgages.> @GoldFinger1969 said:
Liar loans were made because the government wanted them to be made. They knew what was going on. Yeah, there were some bad actors in the bad banks and entirely irresponsible firms (i.e., NovaStar) but they acted with complete knowledge and APPROVAL of state and federal regulators. I'm sure you sure this 1st-hand.
"Hey, I'm giving a $500,000 mortgage to a person who makes $35,000 a year -- aren't I great !!"
Nobody thought that housing prices would fall in nominal terms. Had never happened since data started in 1967. Even the 1980-81 and 1989-91 housing recessions didn't go negative. So in that respect, except for the Worst of the Worst, the questionable loans MIGHT have worked out if housing prices had not declined. The ratings agencies did NOT take that into their business models (probably should have, under a bearish scenario).
Nobody? Never happened before?
First of all, there's no national housing market although financial pundits like to discuss this creature. Every housing market is local. Rarely do all areas of the country decline at the same time, maybe that's what you mean? Maybe you forgot about the 25% crash in LA, Riverside, and Ventura county in the early 90's for example?
@dcarr said:
Citibank was not "forced" to make such loans. The Government-Sponsored Enterprises (GSEs) wanted the loans to be available. But they could not legally force Citibank or anyone else to make such loans. They could only encourage them to do so and to provide backing for them to do so. It was entirely Citibank's decision to make them. And of course, their plan was to securitize them and package them with insurance from AIG, into "Mortgage Backed Securites" (MBS) and offload them onto some suckers. AIG was happy to rake in the fees and never planned to pay out on the insurance.
Yes, they weren't forced...technically. But what happens to their CRA score and there relationship to the regulators if all their competitors are making crap loans to "politically marginalized groups" and Citibank isn't ???
AIG didn't provide insurance for MBS or CMOs. Credit default swaps are separate. AIGs CEO was chosen by Elliot Spitzer and his party.
Comments
No, it was an administrative fee. The big $$$ were from the Citibank preferred and common shares.
Citibank got a total of $45 BB. The government made about $13 BB. Meanwhile, Citibank common stock for the shareholders is less than 1/10th the 2007 price.
Some "bailout" !!
Meanwhile, unions and S&L politicians are being bailed out with NO responsibility for their fiscal mismanagement in part because people are focused on non-existend Wall Street bailouts.
The Fed is the most transparent institution we have. Exactly what don't you know about ?
Uh, no they wouldn't. AIG had the assets to pay it off 100 cents on the dollar but not at that time because everything froze up. It was a $12 BB payment and GS would have gotten about $6-$8 BB.
Their equity capital was about $50 BB so a $4-$6 BB hit is just a scratch. Particularly after TARP $$$.;
People who think the Wall Street banks were in trouble simply can't read a balance sheet. I see these jokers all the time and they are just regurgitating slop they read on the Internet.
I owned GS bonds so I was watching GS balance sheet and stock price every few minutes (!) for DAYS. Trust me, if they had "serious finanacial trouble" my team and I would have dumped the bonds pronto (like with Lehman Brothers).
this is because most Americans (who are also heavily in debt) do not understand the meaning of "fiscal management." Majority of the remaining Americans realize their choices in these politicians means little to nothing.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
How much gold and silver is actually in the vault would be a good starting point. A thorough and truly independent audit is needed.
FED meetings are in reality corporate board meetings. What comes out from behind the closed (non-transparent) door is simply what they and their counterparts in public office think we should believe. Being the financier of congress's unlimited need for stupid money protects them from actual and effective congressional oversight.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Lack of proper risk assessment (greed), while using other people's money, is what got them in trouble.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
I owned GS bonds so I was watching GS balance sheet and stock price every few minutes (!) for DAYS. Trust me, if they had "serious finanacial trouble" my team and I would have dumped the bonds pronto (like with Lehman Brothers).
Apparently, you don't know what you don't know, to wit:
FOR IMMEDIATE RELEASE
Thursday, September 20, 2018
Contact: Nick Jacobs, 202-618-6430 or njacobs@bettermarkets.com
Email shows Goldman admitted it was “toast” and only survived due to government bailouts
Washington, D.C. – On the tenth anniversary of Morgan Stanley and Goldman Sachs failing on Friday, September 20, 2008, Dennis Kelleher, President and CEO of Better Markets, issued the following statement:
“Goldman Sachs has relentlessly tried to rewrite the history of the 2008 crash, pretending that it was never at risk of failure. That is simply false. As proved by an email from ten years ago (reproduced below), Goldman Sachs was ‘toast’ and would have gone bankrupt but for being bailed out by the United States government and taxpayers. Those bailouts saved the bank and the jobs, status and wealth of all the Goldman bankers. For example, the astronomical wealth of CEO Lloyd Blankfein, former President Gary Cohn and all the other Goldman partners only exists today because they were bailed out. Just like the shareholders in bankrupt Lehman Brothers, their stock and options would have been worthless, including the recently reported $3 billion ‘Goldman partners’ haul on crisis-era options.
“We know this because, ten years ago today, just five days after Lehman Brothers filed for bankruptcy, four days after the $85 billion bailout of AIG, and days after Treasury Secretary Paulson effectively nationalized the $3.7 trillion money market industry via a guaranty program, Morgan Stanley called New York Fed President Tim Geithner to inform him that it would not be able to open its doors on Monday and Goldman admitted that, if that happened, it was ‘toast,’ as reflect in an internal Fed email (reproduced below).
“While many are remembering the 10th anniversary of the collapse of Lehman Brothers and the onset of the worse financial crash since 1929, there is too much spin, self-congratulation and omission or denial of the actual facts. As we have detailed, the crash had many causes, but a big one was the reckless and illegal activities of Wall Street’s too-big-to-fail firms, which were nonetheless bailed out without any accountability. On this 10th anniversary, it is important to remember that Goldman Sachs and the other too-big-to-fail financial firms only exist today due to the generosity and decisive role of the U.S. government and taxpayers in stopping the crisis and saving those Wall Street giants with trillions of dollars in bailouts. False narratives, forgetting or ignoring those facts and so many others may be comforting to those on Wall Street and their allies, but it blinds them to what is happening in the country and why.”
This email was from Michael Silva who was the chief of staff and senior vice president for the Executive Group at the New York Fed, and relates to a phone call from Morgan Stanley (MS) to Timothy F. Geithner (TFG), then President of the Federal Reserve Bank of New York, about it and Goldman Sachs (GS).
I knew it would happen.
What is the data they are using? Powell all but admitted that the government data they have been using is not accurate (jobs numbers and the constant corrections). Are inflation numbers that are massaged to eliminate basic necessities what we should be using?
What is more important, employment or inflation? We have heard both. I am not saying this is not a difficult tap-dance, but what if we knew what the Fed's acceptable unemployment number is, modeling is easier. Economists that I have seen guess between 4 and 4.5% - and what job numbers are you using? The BS numbers that have been released all year and corrected by 900K at this point? Regarding inflation, they say 2% inflation is the goal, but we also know that is BS based on their recent rate cuts. Again, I realize this is tough when Yellen is stabbing you in the back with her policies. Maybe a little transparency that the Fed's hands are tied regarding inflation when the Treasury and government spending is working against them. If they are truly independent (lol) he could speak freely and be transparent
GF, I normally agree with your posts, but being the "most transparent institution" is like being the best looking in an ugly contest.
Dennis Kelleher is a financial doofus. Goldman Sachs paid back the TARP $$$ within 9 months. I don't think a bank that was "toast" would have been able to pay back that loan WITHOUT diluting their shareholders as was done by Citibank. Kelleher can't read a balance sheet and is very quiet on how a $4 BB hit imperils a bank with $50 BB in equity capital.
But he sure remained quiet when the Teamsters Pension Plan, the UAW, and Detroit penisoners were bailed out with free money that will NEVER be paid back.
1 more thing: both Goldman and JP Morgan asked to NOT receive TARP $$$. Doesn't sound like they really needed the money, huh ? They were forced at gunpoint to take the TARP $$$ so as not to "stigmatize" other more needy TARP recipients.
There's a difference between TRANSPARENCY and ACCURACY. You are correct that there are big changes in data, revisions, benchmark revisions, etc. But the Fed deals with the information that it has at that moment. In that respect, they do the best they can with the information they have AT THAT TIME.
Have you seen the press conferences like last week's after the FOMC meets to decide on Fed policy ? Jay Powell speaks about what the Fed is up to....and then....he takes Q&A for 45 minutes from the press who can ask him ANYTHING about the economy.
You think politicians do that with spending, entitlements, etc. ? No way.
It's ridiculous that the Fed -- which made the government about $500 BB in "profits" the last 10-12 years -- gets attacked by folks who have no better plan for a monetary system. The profit center gets attacked...the cost centers get a free pass.
We middle class folks attack the FED because they are enriching the top 10% at our expense. Their modern management of our economy is designed for this result and they have been 100% successful.
Defenders of our central bank are normally those that profit in some way at the expense of the innocent outsiders. The economy is not a "market," it is a specific money movement system that is forced on everyone. It should be designed and operated in a way that does not take from some to enrich others. Such enrichment should be limited to valid markets that are tightly regulated. I am a strong supporter of maximum employment and stable prices and the FED should be limited to this mandate. After all, theses are the limitations that allowed it to be forced on us by our elected leaders.
The price of gold is the true tool for measuring the FED's ability to do it's authorized job.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
" No, it was an administrative fee. The big $$$ were from the Citibank preferred and common shares. "
It can be called whatever..... it still released Citigroup from the agreement they had entered into and were bound by.. and the release was to their advantage (Citigroup).
A bailout is still a bailout. You had made a statement to the effect that the FED does NOT bail out banks. I think the examples given appear to disprove that assertion.
Really ? So the shareholders were "bailed out" and are sitting with a 90% loss ?
How come "bailouts" for politically connnected special interest groups don't include a 90% haircut ? 
I'm sorry, but "bailout" to me means you got money you weren't entitled to. Since some banks didn't even WANT the TARP $$$ and others got diluted to hell, it seems asinine to me to say the banks got "bailed out." Since the Treasury made $$$ on the policy, no bailout took place.
Explain the advantage in having your shareholders diluted 90% ? Have you punched up a long-term chart of Citibank ? The release was NOT to Citibank's advantage, it was an administrative detail. You think Citibank was going to be part of the U.S. Treasury for years and decades ?
.> @GoldFinger1969 said:
.
The intent of the bailout was not to help shareholders. Citibank made bad choices. They also engaged in unethical dealings. And they made a lot of money that they weren't really entitled to. Their shareholders deserved what they got (although bank management did not get what they deserved). The interconnected incestuous relationship between the FED and the banks could not allow the Citibank domino to fall. So Citibank was supported (yes, bailed out) to the extent necessary to keep it from toppling over into the next domino.
.
Never forget.
Those bailouts saved the bank and the jobs, status and wealth of all the Goldman bankers. For example, the astronomical wealth of CEO Lloyd Blankfein, former President Gary Cohn and all the other Goldman partners only exists today because they were bailed out. Just like the shareholders in bankrupt Lehman Brothers, their stock and options would have been worthless, including the recently reported $3 billion ‘Goldman partners’ haul on crisis-era options.
I knew it would happen.
The initial 2008-09 bailouts may have enriched banks/bankers but it did save the banking industry and therefore the common folk who depend on it. Destruction of a national economy leads to destruction of the nation that hosts it. Problem lies in once FED/Treas. Dept. learned they could print endless amounts of money without blowing up the economy they continued to do so carelessly ever since then (various forms of QE) at the expense of higher inflation. Since this magic money tree (MMT) tool continues to be at their disposal they have become more careless in their oversight of the economy. They now have this escape hatch from their mismanagement.
True definition of economic inflation is an increase in the money supply. The result is higher price inflation.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Yes, success and failure are to be shared.
Knowledge is the enemy of fear
Banks/bankers got bonuses while the common folk got higher prices. Sharing? LOL
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
There was some Muppet band with a song called "The Song Remains the Same" Expect MUCH MORE of the same. RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
The problem is they've essentially removed the consequence of pain from bad decisions. If I thought I was immortal, I would live my life differently than I do today. But it's the threat of pain and death that keep me from making decisions with bad health implications. Once you've removed the ultimate penalty of bankruptcy, liquidation, and failure, banks and others are encouraged to act with reckless abandon. Is that preferable? Perhaps if the safety net wasn't there we wouldn't get into these predicaments or they wouldn't be as bad.
And one with a song called "Won't Get Fooled Again."
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
How about "You never give me your money, you only give me your funny paper". The Beatles
But the bank wasn't in need of a "bailout." Banks run into temporary liquidity issues because of the nature of banking. It's the nature of fractional reserve banking.
They didn't engage in unethical dealings -- unless you mean making no-down and low-down mortgages to PC-groups mandated by HUD, Fannie, FHA, and Freddie. The government -- NOT the Fed -- wanted those mortgages made....the Fed (Greenspan) was lobbying to END the policy and the POLITICIANS and GSEs fought it tooth and nail. I know -- I hosted these lobbyists for my trade group.
Sorry, but being diluted 90% is not being "bailed out." It's in the governments best interests to support banks rather than have to create new ones...pawn the assets off on other banks.....or have the govt run them.
You must have forgot.
The wealth of the Goldman partners was NEVER in doubt because the equity capital never dipped below $50 BB. I know -- I was tracking it minute-by-minute in September and October 2008.
Lehman Brothers CEO Dick Fuld lost $700,000,000 in stock, RSUs, and options. Your source clearly wasn't tracking the crisis, this was known by September 16th. Goldman and JP Morgan shares bottomed 3 trading days later; Citibank 5-6 days later.
All of the people you guys quote are financial liars and ignoramuses. They have nothing to say about REAL bailouts because those bailouts benefit their political interests (i.e., members of a certain political party, unions).
$2 trillion is unfunded in pensions/OPEBs for S&L govts. and not a peep from the same frauds who use ERISA to mandate companies fund corporate benefits (except when it leads to union layoffs, then forebearances are given).
The government MADE $$$ on TARP. The "bailout" made them money. But the "bailout" for certain politically-connected groups will NOT make the taxpayers $$$. $36,000,000,000 went down the tubes bailing out the Teamsters CSPF and nobody is talking about it because "Wall Street greed" is a better narrative -- if false -- than "union and political party slush fund" used to siphon off retiree benefits.
Wall Street is for The Rich. Unions are for The Little Guy. I know -- I heard it on CNN. And MSNBC. And ABC. And CBS. And ABC.
Nonsense....when the government declared a Bank Holiday in 1933, did it "bail out" millions of American's deposits ? Maybe the average American should have gotten daily or weekly balance sheets on their banks sent by Western Union to make sure they put their money in safe banks ?
I'm assuming they didn't have internet or Bloomberg access in 1933 which would have made that moot !!
While I think tighter controls could be implemented to tie executive pay to stock price performance....and while I think CEO pay is partly disconnected to shareholder performance...to say that banks are immune from bad decisions is prepestorous. That's what the media elite -- mostly financial ignoramuses -- want you to think:
It's a lot easier to cry about "Wall Street bailouts" then tell the truth about REAL bailouts, PC. Unless you track the markets closely like maybe 5-10% of the country does, it will escape your attention. We saw this in the 1970's when we had gasoline lines NOT because of bad OPEC countries but because of price controls put in place by politicians. If you need proof on the bailout nonsense, ask yourself how many news stories you have seen on the $36 billion bailout of the Teamsters CSPF Pension Plan, which will cost the taxpayers far more than TARP made.
My guess is you didn't see a single story on that ERISA and SEC/IRS/DOL fraud and abomoniation by government bureaucrats who are more worried about hedge funds cheating other hedge funds with questionable information than outright fraud by those who say they are out to look after "The Working Man."
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Citibank was not forced to make low-equity, no-equity, and negative-equity home loans.
The entire system needed a bailout to keep it from collapsing into the "abyss". Citibank was on the edge of it. Citibank's stock declined significantly, but intervention prevented the bank from total failure.
Citibank most certainly did engage in unethical business dealings.
In 2007 they convinced the dolts on the board of the Denver Public School system to buy into Citibank's offering of interest rate swaps. Citibank knew it was a total crap deal for DPS, but the bank didn't care. They took DPS for $275 million. The students suffered. But even worse, the City & County of Denver decided the best way to pay for the bad deal was to jack up property taxes. So Denver property owners ended up paying.
Yes, higher prices in their 401ks, homes, and coin collections.
Knowledge is the enemy of fear
Then they were banking with too many fractions. When banks push the envelope on fractional lending they becoming vulnerable. This is their decision, they should suffer the consequences.
You make it sound like it is the fault of fractional banking. It is the banks' fault when they lend too many "fractions."
Their next, and ultimate downfall, will be too much derivative exposure.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
They didn't have a Magic Money Tree with an unlimited supply of paper and ink in 1933, they were tied to a gold standard.
They became immune when they were thrown life rafts in 2008-09.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
the bank wasn't in need of a "bailout."
No, it was in need of bankruptcy proceedings, reorganization, executive compensaton clawbacks and firings.
Banks run into temporary liquidity issues because of the nature of banking. It's the nature of fractional reserve banking.
They didn't engage in unethical dealings
Yeah, liquidity issues that require more debt being issued and more money created from thin air - resulting in more revenue flow to the bankers for doing exactly nothing to earn it. And if those loans don't work out as planned, the same people who are getting fleeced by loans created by fractional reserve money creation end up bailing out those same banks while inflation eats up their purchasing power at the same time.. That's as unethical as it can possibly be.
All of the people you guys quote are financial liars and ignoramuses.
You resort to name calling only because you disagree with their exposure of the ugly underbelly of the debt-based Federal Reserve banking system.
$2 trillion is unfunded in pensions/OPEBs for S&L govts. and not a peep from the same frauds who use ERISA to mandate companies fund corporate benefits (except when it leads to union layoffs, then forebearances are given).
You continue to deflect from criticisms of the banking system by pointing out corruption inherent in union organizations, and that is a separate issue. If you were to stop trying to deflect from the core problem of having a rigged money system, you might begin to see that most other problems have a root cause and that root cause is the Fed and their minions.
I knew it would happen.
They most certainly WERE and it started with Andrew Cuomo and HUD and the Clinton Administration wanting lending standards expanded for CRA purposes in 1996 and 1998.
That's what started it and anybody who follows the mortgage market knows that to be the case. You needed time after the 1994 MBS blowup to heal the markets and by 1996 and especially 1998 they were able to force lousy mortgages on the banks.
They needed liquidity lines, yes. But no "bailout" happened as their shareholders paid a price. You keep using wors inappropriately and it stems from your lack of knowledge of banking and Fed policy.
This junk again ? Caveat Emptor. Denver thought this swap was good for THEM....Citibank gave them the risks to the downside. They ignored it.
Maybe the same idiots who invited Venezuelan gangs into their city should have read the fine print.
I call them ignorant because their track record in investment performance and economic predictions SUCKS. They have no credibility. They have no solutions that are practical. They are just in it for clicks and subscribers.
I saw this junk in the 1970's and 1980's.
It's not unions per-se, although this biggie is union-related. It's that the whole "banks were bailed out" crowd -- including you guys -- say nothing about the Treasury MAKING MONEY off TARP with Wall Street banks but LOSING $$$ with smaller banks, unions, and the auto companies (UAW).
Don't tell me about a "bailout" when it's a short-term LOAN and is paid back in FULL within 9 months (JPM, GS) or 18 months (C, WFC, BAC) and there is NO PAYBACK AT ALL for pensions or OPEBs.
Back to the OP of this thread....gold back to $2,670 and will probably set an ATH in December. Year-end retail demand usually hits then.
While what you say is true, no one forced them to make the NINJA loans (no income no job) that were common place. As a Phoenix real estate agent I know this better than anyone. The forced loans you speak of wouldn't have been nearly the problem if it weren't for everyone else being able to get a loan by lying about how much income you made. Who's decision was it to issue loans by trusting borrowers to just say how much they made? Certainly not the government.
Maybe. Do you think the dollar index is going to reverse course and head down? Awfully tough to make new highs when the USD index is on a tear like this.
Dollar is not on a tear. Index is a comparison of select currencies and all the other ones are doing bad. You can put lipstick on a pig but it's still a pig.
Real measurement of a currency is what it will by for it's citizens.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
If you want a law saying you can't get a mortgage unless you put 20% (or 10%) down.....it won't be the banks objecting, it will be the CRA folks and certain voting blocs in one particular party. If you worked in RE, PC, you know EXACTLY what I am talking about.
This isn't even a close call. As late as 2008, the leader of the Senate and the key banking guy in the House were saying Fannie and Freddie could take more risk. MORE risks !!!
You can't make this stuff up !!
Let me be clear: my gold bullish call has nothing to do with the dollar's direction, PC. Unless the dollar SKYROCKETS, I don't think it will be a drag -- or enough of a drag to wipe out the bullish factors that push gold higher.
That said....historically we've had 7-10 year moves in the dollar....we're due for a few years of downdraft....the Fed is likely to cut, other CB's might hike or cut less....I think maybe the dollar is NEUTRAL for gold instead of being a big positive or negative.
I actually think BitCoin might be more important to track. Want to check out that 2023 gold mining supply figure, too.
So the Dollar is the best currency....the problems are other currencies...but you still hate the dollar/the Fed/banks because the dollar doesn't buy what it did 50 or 100 years ago.
Got it.
Since Americans use the dollar and not a basket of foreign currencies or gold or BTC to pay their bills...that is all that matters.
no hate for the dollar, only those responsible for destroying it's purchasing power. That includes the FED that serves as the corporate board for public banks.
Also have a dislike for those who attempt to defend the currency destroyers.
And since Americans are forced to use the dollar for daily transactions it matters greatly how the dollar's purchasing power is managed. And if you don't understand correctly, loss of purchasing power affects one's quality of life.
Being the best currency in the basket does not make it a great currency, just the strongest in a basket full of weak currencies. Being the last of five people drowning does not win a prize.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
I feel like you're deflecting and distracting. The liar loans propelled an increasing and overwhelming demand that pushed prices up too far too fast. That was the problem. Then the demand got instantly cutoff when suddenly the collapse happened and the liar loans went away. Then we had a precipitous decline in home prices which then becomes a bigger and bigger problem for those who have little or no equity. The banks and market can handful of "forced" government mortgage defaults with low or no down. The losses aren't that great unless or until you have housing price collapse which again was caused by the liar loans and the banks in turn lying about the quality of the underlying MBS.
The unit you price in is a denominator which will always be a drag if it is increasing. If it flattens out it will be neutral, and if it declines it will be a tailwind.
Again, if you're pricing gold in dollars, the dollar is the denominator (ounces of gold PER dollar) so my text above applies.
There's been and will be a huge change in the macro US Dollar currency market as the election has provided at least the perception and expectation of more fiscal responsibility and prosperity which is a 180 difference from the perception and expectation of the last few years. People and countries are or will be generally more willing to buy and hold USD and debt because of this. I wouldn't bet against the dollar in the near term.
As an indicator of what? BTC and crypto has been unleashed under the expectation of a change in regulations and a friendlier marketplace, coupled with the recent increase in access via ETFs & options by Wall Street. Crypto is going to surge unbelievably over the next year. Crypto is in a new period of market price discovery where it is adjusting to new levels of acceptance, access, and interest and thus I'm not sure its performance is a good indicator for much else.
As a reference point for the future, BTC is about $97800 at the moment, DXY is knocking on 107.
Liar loans were made because the government wanted them to be made. They knew what was going on. Yeah, there were some bad actors in the bad banks and entirely irresponsible firms (i.e., NovaStar) but they acted with complete knowledge and APPROVAL of state and federal regulators. I'm sure you sure this 1st-hand.
"Hey, I'm giving a $500,000 mortgage to a person who makes $35,000 a year -- aren't I great !!"
Nobody thought that housing prices would fall in nominal terms. Had never happened since data started in 1967. Even the 1980-81 and 1989-91 housing recessions didn't go negative. So in that respect, except for the Worst of the Worst, the questionable loans MIGHT have worked out if housing prices had not declined. The ratings agencies did NOT take that into their business models (probably should have, under a bearish scenario).
Remember: it wasn't the bad loans that sunk the banks, it was excessive leverage. Carlyle Capital went under in 2007 and they invested in U.S. Treasuries rated AAA -- but they had levered up 30-to-1.
Thank you FED. The harsh reality is that the devaluation of the dollar will continue until it meets the same fate as every paper currency throughout history—complete worthlessness.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
If you think we can have a Gold or Monetary Standard currency where the adustment to exogenous economic disolations is done via wages and prices, I'm sorry, you're living in a fantasyworld.
You might want baseball to be played for 20 innings with 6 outs per inning and 8 balls is a walk and 5 strikes is a strikeout. But that's not the game we are given.
Ditto for the Fed and currency.
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Citibank was not "forced" to make such loans. The Government-Sponsored Enterprises (GSEs) wanted the loans to be available. But they could not legally force Citibank or anyone else to make such loans. They could only encourage them to do so and to provide backing for them to do so. It was entirely Citibank's decision to make them. And of course, their plan was to securitize them and package them with insurance from AIG, into "Mortgage Backed Securites" (MBS) and offload them onto some suckers. AIG was happy to rake in the fees and never planned to pay out on the insurance.
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Not "junk".
It was a serious matter and illustrated how much of a scammer Citibank was in that transaction.
Nothing but more deflection/distraction attempts here. Veneuelan gangs ?
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don't need a gold standard for sound money. All we need is law that requires congress spend no more than what is in the coffers. The White House could prepare all the budgets they want, it is congress that is eager to spend all that has been allotted, even when it's not there. A balanced budget required by law should do the trick.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
A balanced budget required by law should do the trick.
Even that wouldn't solve the debt problem, but at least it would indicate some semblance of integrity.
I knew it would happen.
We are a land of "law and order". Lol
Ban Congress.
Knowledge is the enemy of fear
Not only that, but the banks lied about the quality of the loans in the MBSs. They were packaging up liar loans and passing them off as having qualified buyers. So while the government encouraged it, the banks lied about the quality of the mortgages.> @GoldFinger1969 said:
Nobody? Never happened before?
First of all, there's no national housing market although financial pundits like to discuss this creature. Every housing market is local. Rarely do all areas of the country decline at the same time, maybe that's what you mean? Maybe you forgot about the 25% crash in LA, Riverside, and Ventura county in the early 90's for example?
Yes, they weren't forced...technically. But what happens to their CRA score and there relationship to the regulators if all their competitors are making crap loans to "politically marginalized groups" and Citibank isn't ???
AIG didn't provide insurance for MBS or CMOs. Credit default swaps are separate. AIGs CEO was chosen by Elliot Spitzer and his party.
The elected officials made a bad choice. You blame the seller, not the buyer.