As Treasury Secretary Tim Geithner orchestrated a plan to help the nation's largest banks purge themselves of toxic mortgage assets, Citigroup and Bank of America have been aggressively scooping up those same securities in the secondary market, sources told The Post.
(Excerpt) Read more at nypost.com ...
Yep, Geithner lost all credibility with his answers at the hearing today.
1.When he responded to a GREAT question about banning " Naked Credit Default Swaps"...In a halting voice, he basicly said he wasn't in favor of banning those as opposed to for instance legal hedging by concerned firms who are trying to protect business interests. He showed his colors here...didn't want to piss off his friends Soros, Simmons, et al in the Hedge funds.
2. He he got a question about what's taking so long to fix the 'crisis' (never let a good crisis go to waste). By ignoring the cause of the crisis he got to mention all his repairs, where all that's really required would be to ban naked shorts, reinstate the uptick rule, go back to the 'lower of cost or market', instead of 'mark-to-market'!!! Geitner is in no hurry to 'fix' the crisis, the agenda items haven't all been accomplished yet (Key agenda item--power to sieze corporations, and a 'Regulation Czar')
Make sure to click on Citi-Fraud! Either purposely or incompetently The Resident cut a real bad deal for you the taxpayer already on Citi-fraud. Coincidence? Top donor to The Residents Inaugeration. Coincidence? Look who is movin on up to the Treasury! Coincidence? US of Citi-fraud, Coincidence??
http://www.noquarterusa.net/blog/2008/09/21/baracks-wall-street-problem-is-now-americas/
I told you so..... The huge subsidy to banks hidden inside of Tim Geithner's public-private partnership program may already be leading banks to load up on securities they plan to sell at inflated prices. According to the New York Post, Citi and Bank of America have been aggressively buying up Alt-A and ARM mortgage backed securities, sometimes paying more than the going rate of around 30 cents on the dollar. ....Recently, securities rated AAA have changed hands for roughly 30 cents on the dollar, and most of the buyers have been hedge funds acting opportunistically on a bet that prices will rise over time. However, sources said Citi and BofA have trumped those bids. There's nothing complicated about this at all. Buy for 30 cents, sell to the PPIP for 50 cents, pocket a quick (and huge) profit immediately and nobody's the wiser. Oops - now someone is the wiser. Oh darn. The reason ALT-A (liar loans) and Option ARM securities are trading at 20-30 cents on the dollar is that nearly all of those "loans" were either made to someone who lied about their income, couldn't afford the reset/recast payment and is underwater on their house (and thus can't refinance), or both. When those loans default (and most of them eventually will, even if they're paying now) recovery is extraordinarily poor; 30 cents is likely just about right. Get the BBQ Sauce. WSJ: Sales of new homes rose in February for the first time in seven months, the Commerce Department reported Wednesday, another sign that the housing market is thawing Bloomberg: Purchases of new homes in the U.S. unexpectedly rose in February from a record low as plummeting prices and cheaper mortgage rates lured some buyers. Sales increased 4.7 percent to an annual pace of 337,000 . . . Marketwatch: The U.S. housing sector continues to see signs of improvement. The latest government data showed new home sales climbed in February for the first time in seven months, sending shares of home-building companies soaring.>A parade of the mathematically innumerate business writers (and even worse headline writers!) continue to misread data. The latest evidence? New Home Sales. After incorrectly reporting the Existing Home Sales, the mainstream media misread the Census department report of New Homes. No, New Home Sales data did not improve. In fact, they were not only not positive, they were actually horrific. The year over year number was a terrible down 41%. Sales from this same period a year ago have nearly been halved. Why did the media report this as positive? If you only read the headline number, you saw a positive datapoint: February was plus 4.7% over January. To get the the facts, you need to read below the headline. In the present case, it wasn’t the seasonality factor that was confusing, it was the “90-percent confidence intervals” — or as it is more commonly known, the margin of error. From the Census Bureau: Sales of new one-family houses in February 2009 were at a seasonally adjusted annual rate of 337,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4.7 percent (±18.3%)* above the revised January rate of 322,000, but is 41.1 percent (±7.9%) below the February 2008 estimate of 572,000. The median sales price of new houses sold in February 2009 was $200,900; the average sales price was $251,000. The seasonally adjusted estimate of new houses for sale at the end of February was 330,000. This represents a supply of 12.2 months at the current sales rate. Note that the month over month data at 4.7% — plus or minus 18.3% — is statistically insignificant. (i.e., meaningless). The reported data does not inform us if sales improved month-over-month or not. It is a range, from down -13.6% to plus 23%. Since “zero” is part of that range, we can draw no conclusion. As the Census Department itself notes, “the change is not statistically significant; that is, it is uncertain whether there was an increase or decrease.” The data does however, tell us that the year-over-year sales fell 41.1% plus or minus 7.9% gives us a range of -49% to -33.2%. The entire range is negative, therefore we can conclude sales fell year-over-year. These are facts. This is data. This is how you interpret it. Most of the MSM reports (WSJ, Marketwatch, Bloomberg) were simply wrong. Not nuanced, not shaded, but 2+2=5 wrong. Let me remind that many of these folks incorrectly misinformed you that Housing wasn’t getting worse in 2006, 2007 and 2008 — just as Home sales and prices went into an historic freefall. Now, these same folks are misinforming you that Housing has turned around and is improving. That is simply unsupported by the data. (And don’t even ask about television — they simply read the wrong news. Here is a life lesson for you: Never believe news people who read teleprompters. They have no idea what they are doing, they are reading what someone else wrote. When it comes to data interpretation, they are quite literally clueless. Rely on news readers to your personal financial detriment). The bottom line: Learn to interpret data correctly. Avoid using the people who cannot do so as primary news sources. New Home Sales Annual Sales Rate, Seasonal Adjusted Chart via Census Department Previously: A Closer Look at New Home Sales Data (October 2006) http://www.ritholtz.com/blog/2006/10/a-closer-look-at-new-home-sales-data/ April New Home Sales - Revisited (November 2005) New Home Sales Fall 42% (May 2008) Sources: New-Home Sales Rise 4.7% New-Home Sales in U.S. Rose 4.7% to a 337,000 Pace Home-builder shares jump as February new home sales increase Unexpected Increase in Factory Orders The New York Times came closest to getting it right “In another report, the government said that new single-family home sales rose 4.7 percent in February, but that it was still the second-worst month on record, and was down more than 40 percent from February a year ago.” SHOULD READ Obama’s Chief of Staff Return Money From Stock Options He Got While Helping to Drive Freddie Mac Into the Ground? The collapse of mortgage giants Fannie Mae and Freddie Mac were key elements in the financial meltdown of 2008. It’s no secret that Democrats under Bill Clinton had used both organizations as personal piggybanks to reward loyal friends. Note: President Bush put a stop to such gross patronage during his Administration. We all know about the tens of millions in bonuses Fannie Mae paid to Franklin Raines, former Clinton White House Budget Director and Jamie Gorelick, former Clinton Deputy Attorney General. (So far no angry ACORN protests outside their palatial homes and no demand by Democrats in Congress that the money be returned). But what continues to go largely unreported is the role that White House Chief of Staff Rahm Emanuel played at Freddie Mac and the compensation he earned for showing up for board meetings six times a year. Later, as a candidate for congress Emanuel received more in campaign contributions from Freddie Mac than any other candidate. Rahm Emanuel’s profitable stint at mortgage giant Chicago Tribune …Because of Freddie Mac’s federal charter, the board in Emanuel’s day was a hybrid of directors elected by shareholders and those appointed by the president. In his final year in office, Clinton tapped three close pals: Emanuel, Washington lobbyist and golfing partner James Free, and Harold Ickes, a former White House aide instrumental in securing the election of Hillary Clinton to the U.S. Senate. Free’s appointment was good for four months, and Ickes’ only three months. He was named to the Freddie Mac board in February 2000 by Clinton, whom Emanuel had served as White House political director and vocal defender during the Whitewater and Monica Lewinsky scandals. The board met no more than six times a year. Unlike most fellow directors, Emanuel was not assigned to any of the board’s working committees, according to company proxy statements. Immediately upon joining the board, Emanuel and other new directors qualified for $380,000 in stock and options plus a $20,000 annual fee, records indicate. On Emanuel’s watch, the board was told by executives of a plan to use accounting tricks to mislead shareholders about outsize profits the government-chartered firm was then reaping from risky investments. The goal was to push earnings onto the books in future years, ensuring that Freddie Mac would appear profitable on paper for years to come and helping maximize annual bonuses for company brass. The accounting scandal wasn’t the only one that brewed during Emanuel’s tenure. See also.. Rahm Emanuel's home According to the Cook County Assessor’s website, the Chicago home of four-term Democrat Congressman and new White House Chief of Staff, Rahm Emanuel, doesn’t exist. While the address of 4228 North Hermitage is listed as Emanuel’s residence on the Illinois State Board of Elections’ website, there seems to be no public record of Emanuel ever paying property taxes on this home. The Cook County Assessor’s and Cook County Treasurer’s online records indicate Emanuel’s Chicago neighbors pay between $3,500 and $7,000 annually. However, Illinois Review has been unable to locate any evidence that the former Clinton advisor and investment banker is paying his fair share of Cook County ’s notoriously high tax burden. Why wouldn’t 4228 North Hermitage property owners Rahm Emanuel and wife Amy Rule pay property taxes? One reason may be because Emanuel and Rule declared their 4228 North Hermitage home as the office location for their personal non-profit foundation called the “Rahm Emanuel and Amy Rule Charitable Foundation“. As the non-profit’s headquarters, their home could be exempt from paying property taxes. In January 2007, USA Todayreported on Emanuel’s foundation: The Rahm Emanuel and Amy Rule Charitable Trust was formed in 2002, when the Chicago lawmaker was first elected. The former Clinton White House aide and his wife, Amy Rule, are its only donors. Emanuel was an investment banker after serving in the White House. The trust reported having $2,900 on hand at the end of 2005 after receiving $34,000 from Emanuel and donating more than $31,000 During the past three years, Emanuel’s charity gave nearly $25,000 to the Anshe Emet synagogue and school [a private school that the Rahm/Rule children attend]…, and $15,000 to the foundation run by former president Bill Clinton. It also gave $14,000 to Marwen, a Chicago charity that provides art classes and other educational help to low-income children. Rule is on 20 Marwen’s board. (He doesn’t pay any property taxes and he gets income tax write-offs by donating $25000 to the Synagogue and other amounts of money to his Foundation. This allows his kids to attend school tuition-free and allows him to expense a lot of personal expenses. What a racket! Take all your income and donate it back to yourself via tax exempt orgs where you can spend it on as expenses to operate your car, pay the electric and water bills, etc. I guess if you are a hypocritical “liberal” democrat who advocates raising taxes on everyone else, this is all permissible.) Emanuel’s 4228 North Hermitage home is one of the largest in the neighborhood, with a side ya rd that appears to be a vacant lot, making the Emanuels’ property the largest portion on the block. Other North Hermitage homes on Emanuel’s block are valued in the $500,000 plus range. According to Cook County Treasurer’s website, the Chicago owners of nearby 118 year old 4222 North Hermitage pay almost $6800 annually. The family at 4224 North Heritage pays $6000 each year in property taxes. President Obama - himself a connected, Chicago insider who has benefited from questionable land deals - may find it difficult to explain why his very 20 own Chicago-based chief of staff doesn’t pay property taxes like the “little guy” he claims to represent. Or perhaps allowing his wealthy friends to avoid taxes is part of Obama’s trickle down redistribution economics. It’s certainly the kind of “change” we Illinoisans can believe in…since we’re quite familiar with it here in the federal indictment land of Daley, Blagojevich, Madigan, Jones, CelliniRezko,etc. Plenty of Rahm at the AIG Table Over the past ten days, as the furor over AIG retention plan bonuses has focused on Sen. Chris Dodd and Secretary of the Treasury Timothy Geithner, the White House has undertaken a PR offensive to protect the highest ranking Obama Administration official who was involved in the House and Senate negotiations over the stimulus bill, in which the AIG waiver language was inserted. "Right now, you get the feeling this is all about protecting [White House Chief of Staff] Rahm Emanuel,” says a former Treasury Department lawyer, who worked in that department's counsel's office on the Troubled Asset Relief Program (TARP) before joining a D.C.-based law firm in February. "At the time, we were led to believe there were basically three or four people from the Administration at the table when the final deals were cut and one of them was Emanuel." Informal advisers to Geithner are growing increasingly frustrated, they say, that Geithner is being held up as the straw man for the public anger over the bonuses. "Just over the weekend you saw a new guy added to the target list, [White House economics adviser Larry] Summers,” says a longtime Geithner colleague at the New York Fed. "You have Dodd, Geithner, Summers, but there were other, more senior political people involved in this mess, and their names aren't being mentioned. Why isn't anyone asking Rahm Emanuel, 'What meetings were you in?' 'What did you and the President know and when did you know it?' Tim has some culpability, but he's not the guy who signed off on the Dodd language. He wasn't that empowered to do something like that." (Excerpt) Read more at spectator.org ... >In researching and think about AIG, I have been writing about them as if it were two separate companies: A well regulated Insurer, and a rogue derivatives products firm (FP). The working assumption has been that the regulated insurer was run fairly conservatively, and the structured financial product side run like a giant hedge fund. The 32% net profit retention on the FP side is actually better than what most hedge funds see. This dichotomy is mostly true, but with now has an interesting twist to it. In congressional testimony today, Ben Bernanke implied that had the Fed allowed AIG too fall, he detailed what might have happened had AIG been allowed to fail: The Federal Reserve and the Treasury agreed that AIG’s failure under the conditions then prevailing would have posed unacceptable risks for the global financial system and for our economy. Some of AIG’s insurance subsidiaries, which are among the largest in the United States and the world, would have likely been put into rehabilitation by their regulators, leaving policyholders facing considerable uncertainty about the status of their claims. State and local government entities that had lent more than $10 billion to AIG would have suffered losses. Workers whose 401(k) plans had purchased $40 billion of insurance from AIG against the risk that their stable value funds would decline in value would have seen that insurance disappear. In addition, AIG’s insurance subsidiaries had substantial derivatives exposures to AIG-FP that could have weakened them in the event of the parent company’s failure. If we are to take Bernanke at face value, he is saying that AIGFP had buried their own firm with junk paper. BB does not define what “substantial derivative exposure” meant — but given the $2.7 trillion dollars in derivatives exposure that FP had, even a tiny percentage might amount to an enormous sum. That the collapse of AIG Financial Products would have damaged the other Insurance half of the firm is a frightening development. Even more fascinating is this “lesson learned” To conclude, I would note that AIG offers two clear lessons for the upcoming discussion in the Congress and elsewhere on regulatory reform. First, AIG highlights the urgent need for new resolution procedures for systemically important nonbank financial firms. If a federal agency had had such tools on September 16, they could have been used to put AIG into conservatorship or receivership, unwind it slowly, protect policyholders, and impose haircuts on creditors and counterparties as appropriate. That outcome would have been far preferable to the situation we find ourselves in now. Source: Chairman Ben S. Bernanke on American International Group http://www.siliconvalleywatcher.com/mt/archives/2008/10/the_size_of_der.php No longer a systemic risk here… It was a giant fraudulant ponzi scheme to begin with let them take their licks they will bankrupt us otherwise! Fraud here.. Public Risk here.. Its a lot easier to make money from a Crisis that you helped create for THAT VERY PURPOSE. More on that Evil Maggot Soros! http://transsylvaniaphoenix.blogspot.com/2009/03/look-who-is-doing-great-financially.html Soros, Dell Join Flowers in Purchase of IndyMac UK's Daily Mail: I have never understood how anti-capitalist liberals let themselves and their ideals to be purchased at wholesale prices by a man who is the embodiment of what they hate most: a capitalist shark. And not just any kind of capitalist shark; the Great White of the financial speculators, a man so ruthless and so greedy he brings entire nations to ruin just to fill up his bank accounts and satisfy his mega-ego. But the damage may already have been done. By afternoon, a poor showing of buyers at a Treasury bond auction sent interest rates sharply higher, raising fears about the U.S. ability to sell a massive load of $2.5 trillion of debt this year. No worry...Bernanke is printing the dollars now to cover whatever the Treasury issues. Leave it to Beaver Geithner starring as Eddie Haskell(: Gee, your kitchen always looks so clean. [Michelle Obama]: Why, thank you, Eddie. Geithner starring as Eddie Haskell: My mother says it looks as though you never do any work in here. Washington Times ^ MARKET MANIPULATION DAMAGE CONTROL! USE A FLAW TO FIX A FLAW THEN LEAVE THE ORIGINAL FLAW UNTOUCHED! An unguarded comment by Treasury Secretary Timothy F. Geithner on Wednesday set off a sudden drop in the dollar and contributed to a chain of market-rocking events that included a setback in the stock market and a sharp uptick in interest rates. Mr. Geithner appeared to lend his support to a proposal by China's central bank governor to replace the dollar as the world's reserve currency with a basket of currencies that would be managed by the International Monetary Fund. In an appearance before the Council on Foreign Relations in New York on Wednesday morning, Mr. Geithner raised eyebrows by saying that "we're actually quite open to that," only a day after both he and President Obama had vehemently rejected the idea and affirmed their strong support for the U.S. currency. The dollar plummeted by as much as 1.3 percent against the euro within 10 minutes of his remarks. But then the greenback quickly recouped most of its losses after Mr. Geithner retracted his statement and said, "I think the dollar remains the world's dominant reserve currency." Later in the day, as concern weighed down the dollar again, White House spokesman Robert Gibbs chimed in to the now universal chorus from top officials that the administration expects the dollar to be the world reserve currency for "a long, long time." But the damage may already have been done. By afternoon, a poor showing of buyers at a Treasury bond auction sent interest rates sharply higher, raising fears about the U.S. ability to sell a massive load of $2.5 trillion of debt this year. Buyers may have been spooked not only by the Treasury secretary's remarks but also by the unveiling of budget plans on Capitol Hill that would double the amount of debt the Treasury has to sell... (Excerpt) Read more at washingtontimes.com ... That Didn't Take Long (Gaming PPIP)
New Home Sales Fell 41% in February 2009
http://www.ritholtz.com/blog/2005/11/new-home-sales-data-dont-rely-on-it-either/
http://www.ritholtz.com/blog/2008/05/new-home-sales-fall-42/
NEW RESIDENTIAL SALES IN FEBRUARY 2009
http://www.census.gov/briefrm/esbr/www/esbr051.html
http://www.census.gov/newhomesales
KELLY EVANS
WSJ, MARCH 26, 2009
http://online.wsj.com/article/SB123798406285137541.html
Shobhana Chandra
Bloomberg, March 25 2009
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a0YI6z_ZfAUE
Dawn Wotapka
Marketwatch, March 25, 2009
http://tinyurl.com/c3pcmc
JACK HEALY
NYT, March 25, 2009
http://www.nytimes.com/2009/03/26/business/economy/26econ.html
By Bob Secter and Andrew Zajac
March 26, 2009
…
Freddie Mac board did most of its work in committees. Yet proxy statements that detailed committee assignments showed none for Emanuel, Free or Ickes during the time they served in 2000 or 2001. Most other directors carried two committee assignments each.
…
[B]uried deep in corporate and government documents on the Freddie Mac Freddie Mac scandal is a little-known and very different story involving Emanuel.
Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
March 24, 2009
http://www.federalreserve.gov/newsevents/testimony/bernanke20090324a.htm
A hedge fund manager who predicted the global credit crunch has said the financial crisis has been 'stimulating' and the culmination of his life's work.
But...but...but...he's a Mecena, a benefactor for the poor and the hungry he gives millions to underdeveloped countries, liberals cry.
Yes you morons, but that's just another investment of his. He's buying entire countries for cheap. LIKE OURS!!!!
The dollar plummeted by as much as 1.3 percent against the euro within 10 minutes of his remarks. But then the greenback quickly recouped most of its losses after Mr. Geithner retracted his statement and said, "I think the dollar remains the world's dominant reserve currency."
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