Thursday, April 23, 2009

The Truth Hurts


"Instead of a bull or a bear market, I call this a “fish market”. It really stinks."
-James West

Bob Chapman, The International Forecaster[BULLSEYE]
The Truth Movement has become a real thorn in the side of the Illuminati. So many people are now finally catching on to their sinister plans that their usual strategies are not working. The facts and predictions divulged to the public via the Truth Movement have proved to be too accurate for the Illuminati to counter with their usual bogus rhetoric because no one believes them anymore. The public, via the elitist-controlled fane-stream media, has listened to Illuminist marionettes, Buck-Busting Ben Bernanke, Hanky Panky Paulson, Caligula (Bush, Jr.), Dead-Eye Dick Cheney, and now our "beloved" Emperor Romulus Augustulus (Obama) and Tiny Tim Geithner, continue to lie to them pathologically, make ridiculous predictions that never come true and regale us with inane platitudes and silly pep talks about things like "hope," "change," "we see signs of improvement" and "recovery is just around the corner," when they know darn well that not only are things getting worse, these miscreants are doing everything they can to intentionally make matters worse by order of the Puppet Masters.

People have caught on to the fact that the economic statistics produced by our government and its various agencies have no basis in reality, and that most of the so-called economists, shills, pundits and moronic talking heads on the fane-stream media are almost always wrong because being right means a trip to the unemployment lines, which are growing ever larger by the minute. So the sheople are now finally starting to look to the people who have demonstrated more accuracy and integrity, and who are still miraculously given coverage by the fane-stream media, such as Jimmy Rogers, Peter Schiff, Michael Hudson, Joseph Stiglitz, Rick Santelli, Meredith Whitney and Elizabeth Warren, to name but a few. These people are becoming virtual folk heroes because they are among the few people given wider coverage by the media who can still be looked to for some reasonable answers and explanations.


If you want to get rid of the Illuminist blight forever, leave your government officials, who are nothing more than pathetic little puppets, alone. Putting anything other than political pressure on those who are in office would play right into the hands of the Illuminati and give them the excuse they need to implement martial law. The ones to go after are the Puppet Masters in the top echelons, who do not currently hold public office, and whose names appear on lists of organizations such as the Trilateral Commission and the Council on Foreign Relations. Let them know in no uncertain terms that they, their filthy wealth, their dark influence and their seditious machinations to subvert our Constitution and implement world government are no longer welcome in the United States of America. We leave the methodology up to the American public, and their limitless ingenuity. Once the Puppet Masters are run out of town, their marionettes will fall to the stage floor in a heap of strings and wooden sticks as their benefactors are no longer there to support them with limitless amounts of cash, equipment, media coverage, brain trusts and human resources. We can then start over and try to get it right this time like our Founding Fathers. Simply applying the Constitution the way it was intended to be applied should prove sufficient for this purpose.

The stock market rally is in the process of coming to an end. All stocks should be sold except gold and silver shares. The rally was engineered by Wall Street, forced short covering, government market manipulation and smoke and mirrors. All we hear from the media, especially CNBC, is the credit crisis is over – stop worrying. The real estate crisis is over. The worst is behind us and the economy is about to take on a new life. A 14,100 Dow is only a stroke away.

While this propaganda spews forth the IMF of all people tells us things are really much worse than we have been told and that we have already experienced $4 trillion in global credit losses. That doesn’t cover the trillions of dollars in losses in residential real estate, commercial real estate and the collapse in the market yet to come. Consumers and business are pulling back and increasing unemployment. U6 unemployment is almost 20% and capacity utilization has fallen to 69.3% from 85%. How can there be a robust recovery? At best with all the injections of capital the economy can move sideways temporarily. Yes, deflation is here, but it for now is being held in abeyance by those massive injections of capital that in the end will prove fruitless and even more damaging.

http://news.goldseek.com/InternationalForecaster/1240425484.php

Big bank profits are bogus! Massive public deception!
by Martin D. Weiss, Ph.D.
...the nation’s banking troubles are many times more severe than the authorities are admitting.

The authorities SAY that all of the 14 largest banks have earned a “passing” grade in their just-completed “stress tests.” But just six months ago, the authorities swore that, without a massive injection of taxpayer funds, those same banks would suffer a fatal meltdown.

Was the bad-debt disease magically cured? Did the economy miraculously turn around? Not quite. In fact, we have overwhelming evidence that the condition of the nation’s banks has deteriorated massively since then.

How can our trusted authorities be so blatantly deceptive and still keep their jobs? Perhaps you should ask Fed Chairman Ben Bernanke. Not long ago, for example, he declared that the total losses from the debt crisis would not exceed $100 billion, while conveying the hope that most of those losses could be soon written off. Also around that time, the International Monetary Fund (IMF) estimated the losses would be $1 trillion, with only a small percentage written off.

The IMF’s latest estimate: $4 trillion in losses, with only one-third of those written off so far. Bernanke’s error factor: He was 4,000 percent off the mark, in a world where 50 percent errors can be lethal.

Meanwhile, based on fourth quarter Fed data, we find that, among the nation’s megabanks, six are at risk of failure in our opinion (seven if you count Wachovia and Wells Fargo as separate institutions).

What Explains the Huge Gap Between Official Declarations and Our Analysis?

We all use essentially the same data. And conceptually, the analytical approach is also similar.

The primary difference is that the regulators have an agenda: Instead of protecting the people from bank failures, they’re trying harder than ever to protect failed banks from the people. Specifically …

They have forever hidden the names of the banks on the FDIC’s “Problem List,” making it almost impossible for average consumers to get prior warnings of troubles.

They have never disclosed their own official ratings of the banks — the CAMELS ratings — making it difficult for the public to find safe institutions they can trust.

They have religiously underestimated — or understated — the depth and breadth of the debt crisis.

They have rigged their recent stress tests to give passing grades to all of the nation’s 14 largest banks, sending the false signal that even the most dangerous among them are somehow “safe.”

Wall Street is aglow with the latest “better-than-expected” earnings reports by major banks. But take one look below the surface, and you’ll see three of the most egregious accounting gimmicks in recent history.

Gimmick #1. Toxic asset cover-up.

Gimmick #2. Reserve flim-flam.

Gimmick #3. The great debt sham.

Consider this scenario: A financially distressed real estate developer owes the bank $4 million. His revenues have plunged. He’s lost a fortune in his properties. And he’s on the brink of bankruptcy.

Therefore, in the secondary market, traders recognize that loans like his are worth, say, only half their face value, or about $2 million. So far, a very common situation, right?

But now imagine this: He walks into the bank one morning and claims that he really owes only $2 million. Why? Because, in theory, he says, he could buy back his own loan for that price, thereby reducing his debt in half.

In practice, of course, that’s a pipedream. If he actually had the cash to buy back his own loans on the market, then he wouldn’t be financially distressed in the first place. And if he weren’t financially distressed, his loans wouldn’t be selling on the market for half price.

The reality is that he can’t buy back his own debt and never will. And even if he could someday, he will still be on the hook for the full $4 million unless and until he files for bankruptcy and the bankruptcy judge decides otherwise.

That’s why the government would never let real estate developers — or hardly anyone else, for that matter — mark down the debts on their books and still stay in business. But guess what? The government lets banks do precisely that!

It’s the ultimate double standard: The banks get away with inflating their toxic assets. But at the same time, they’re allowed to mark to market their own debts, which happen to be trading at huge discounts on the open market precisely because of their toxic assets.

Accountants call it a “credit value adjustment.” I call it cheating.

http://www.moneyandmarkets.com/big-bank-profits-are-bogus-massive-public-deception-33228

So the banks have returned to profitability have they?
By Dan Denning
That was the theme on the market last week. And if it were true, a recovery in bank balance sheets is just the sort of thing that might precede a recovery in the economy. But it probably isn't true. Here's why...

The big three banks reporting last week-Citibank, Goldman Sachs, and JP Morgan-all reported huge revenues from their trading desks. As we reported last week, Goldman's $6.6 billion in trading revenues was not only 70% of total revenues, but it was also a ten billion dollar improvement on a $4 billion loss in the fourth quarter.

JP Morgan reported nearly $5 billion in revenues from fixed income securities trading. And Citigroup reported $4.69 billion in fixed income trading. In fact, all of Citigroup's other major operating segments reported declining revenues for the quarter. Its global credit card revenues fell by 10%. Consumer banking revenues were down 18%. And Citi's Global Wealth Management revenues were down 20%.

But something magic happened in the fixed income trading group for Citi. This is pure gold if you like arcane financial statements packed with fictional earnings. If you dig into the quarterly report, you'll learn than fixed income trading revenues were boosted by a "net $2.5 billion positive CVA on derivative positions, excluding monoclines, mainly due to the widening of Citi's CDS spread.

That takes some sorting out. A CVA is a "credit value adjustment." As you can learn here
http://www.federalreserve.gov/SECRS/2007/February/20070213/R-1266/R-1266_17_1.pdf, it's the credit risk premium of a derivative contract. Once you sort it out, you learn that Citi "made" $2.5 billion on a derivatives position designed to profit when the companies own credit default swaps spreads widen.

Or, in plain English, Citi profited because it made a bet that the cost of insuring itself against a default would go up. The credit default swap market is the place where you can bet on the credit worthiness of a firm, or, essentially, the chance that a firm might default on its bonds. Citi appears to have reported a $2.5 billion trading gain in the fourth quarter precisely because the market thought the company stood a good chance of failing (hence the widening CDS spread).

As far as we can tell, if you use this kind of perverted logic, the closer Citi gets to bankruptcy, the more money it would "make" on its derivatives. That shows you how bogus the quarterly number was. The company reported declining revenues in its core banking and lending activities. But thanks to fixed income and this handy $2.5 billion CVA, the company was able to report $1.5 billion in net income.

http://www.dailyreckoning.com.au/citi-reports-469-billion-in-fixed-income-trading/2009/04/20/

Too Big To Survive
By: John BrowneSenior Market Strategist, Euro Pacific Capital, Inc.
On April 20th, Bank of America announced a first quarter surge in earnings to $4.2 billion. At first blush, it looked like the kind of news that would ignite a stock market rally. Instead, the Dow closed down 289 points. Could it be that, despite the apparent good news, investors don't trust the banks or the economy?

In recent months, the Administration has poured billions of dollars into those banks that it has deemed "too big to fail". B of A alone received some $45 billion. Perhaps now it is time to examine whether the liabilities of these same banks make them, conversely, too big to survive.

Importantly, B of A's sale of China Construction Bank, a much-prized future earner, resulted in a one-time-only earnings contribution of $1.9 billion, or 45 percent of their just posted quarterly profit figure.

In addition, $2.2 billion in gains were contributed by certain mark-to-market bank "adjustments" to Merrill Lynch's structured notes. These gains appear to be the result of recent changes in the accounting rules that now allow banks to "officially" inflate the value of toxic assets and thereby erase billions of dollars of paper losses.

In short, the so-called surge in the earnings of Bank of America had little to do with real, repeatable earnings, and much to do with sales of promising assets and accounting gimmickry.
http://news.goldseek.com/JohnBrowne/1240467000.php

Goldman Sachs Shook Tens of Billions Out of Tax-Payers -- Now They're Whining All the Way to the Bank
By Dean Baker, AlterNet
Lloyd Blankfein, the CEO of Goldman Sachs, is very upset with the Troubled Asset Relief Program (TARP). Last fall, Mr. Blankfein borrowed $10 billion through the TARP at below market interest rates. Now, the government is starting to tie some real conditions to this money, for example, by limiting what Goldman can pay its executives. Mr. Blankfein argues that such conditions are making it impossible to run his business and is now anxious to return the TARP money.

It is great to see that Goldman is finally prepared to go forward into the market without its government training wheels of TARP aid, but, unfortunately, Mr. Blankfein isn't yet confident enough in his business acumen to actually forego government assistance. Goldman Sachs has benefited and continues to benefit enormously from other forms of government aid.

For example, last fall Mr. Blankfein also took advantage of the opportunity to borrow $25 billion with an FDIC guarantee to his creditors.

Goldman Sachs also has the opportunity to borrow at several of the Federal Reserve Board's special lending facilities at below market interest rates.

Mr. Blankfein also got a big wad of taxpayer money from the A.I.G. bailout. It was the biggest single beneficiary of the government's largess, pocketing more than $12 billion.

In short, Mr. Blankfein is not at all prepared to go out on his own in the rough and tumble of the market; he just doesn't like government programs that come with conditions, like the TARP. He would much rather get his government money with no strings attached. And, since there are channels through which Goldman can get government money without any strings, it is perfectly understandable that Mr. Blankfein would opt out of a program with strings.

The basic story is straightforward. The Wall Street crew thinks that they are entitled to pilfer as much as they want from the public and from the government. These people have no interest in a "free market"; they would be scared to death of being forced to work for a living in the absence of a government safety net.

The Wall Street crew has relied on its political power to rig the rules to make them incredibly wealthy. They are relying on this political power to ensure that the rules remained rigged, even though their crooked deck wrecked the economy, costing tens of millions of people their jobs, their homes and their life savings. So far, it looks like the Wall Street boys are winning.
http://www.alternet.org/workplace/137561/goldman_sachs_shook_tens_of_billions_out_of_tax-payers_--_now_they

Housing bubble smackdown: Huge "shadow inventory" portends a bigger crash ahead
Due to the lifting of the foreclosure moratorium at the end of March, the downward slide in housing is gaining speed.

The moratorium was initiated in January to give Obama’s anti-foreclosure program — which is a combination of mortgage modifications and refinancing — a chance to succeed. The goal of the plan was to keep up to 9 million struggling homeowners in their homes, but it’s clear now that the program will fall well short of its objective.

In March, housing prices accelerated on the downside, indicating bigger adjustments dead ahead. Trend lines are steeper now than ever before — nearly perpendicular. Housing prices are not falling, they’re crashing and crashing hard.

If regulators were deployed to the banks that are keeping foreclosed homes off the market, they would probably find that the banks are actually servicing the mortgages on a monthly basis to conceal the extent of their losses. They’d also find that the banks are trying to keep housing prices artificially high to avoid heftier losses that would put them out of business. One thing is certain, 600,000 “disappeared” homes means that housing prices have a lot further to fall and that an even larger segment of the banking system is underwater.

Here is more on the story from Mr. Mortgage “California Foreclosures About to Soar . . . Again”: “Are you ready to see the future? Tens of thousands of foreclosures are only 1-5 months away from hitting that will take total foreclosure counts back to all-time highs. This will flood an already beaten-bloody real estate market with even more supply just in time for the Spring/Summer home selling season . . .

“The bottom line is that there is a massive wave of actual foreclosures that will hit beginning in April that can’t be stopped without a national moratorium.”

The next leg down in housing will be excruciating; every sector will feel the pain. Obama’s $75 billion mortgage rescue plan is a mere pittance; it won’t reduce the principle on mortgages and it won’t stop the bleeding. Policymakers have decided they’ve done enough and are refusing to help. They don’t see the tsunami looming in front of them plain as day. The housing market is going under and it’s going to drag a good part of the broader economy along with it. Stocks, too.
http://www.prisonplanet.com/housing-bubble-smackdown-huge-“shadow-inventory”-portends-a-bigger-crash-ahead.html

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