Greek CDS Overtures Fall on Deaf Ears in Washington…well duhhhh

Trying to confuse us??? I’ve noticed the word derivatives isn’t being said anywhere…nor the fact that they weren’t insured by AIG… hey…they knew the bet…don’t blame us!!! ~jude

* EU Commission wants G20 to debate issue

* CDS speculation worsens Greek woes, politicians say

* Proposals on derivatives, market abuse seen this year

STRASBOURG, France, March 9 (Reuters) – The European Commission will consider banning the naked selling of contracts that investors use to hedge against countries defaulting on their debt, its chief said on Tuesday.

Commission President Jose Manuel Barroso said the European Union’s executive would like the G20 group of developed and developing nations to discuss speculation in credit default swaps (CDS), a form of insurance against default.

Naked selling involves selling a CDS to a buyer who does not hold the underlying sovereign bond.

Barroso’s statement to the European Parliament followed claims by European politicians that speculation in credit default swaps on Greek debt worsened the country’s financial problems.

“A new, ad hoc reflection is needed on credit default swaps regarding sovereign debt,” Barroso said.

“In the short term, we must achieve the necessary coordination to ensure that Member States act in a coordinated fashion, most particularly for ‘naked’ practices. cont…

http://www.guardian.co.uk/business/feedarticle/8981221

Greek Crisis Is Over, Rest of Region Safe, Prodi Says

March 10 (Bloomberg) — The worst of Greece’s financial crisis is over and other European nations won’t follow in its path, said former European Commission President Romano Prodi.

“For Greece, the problem is completely over,” said Prodi, who was also Italian prime minister, in an interview in Shanghai today. “I don’t see any other case now in Europe. I don’t think there is any reason to think the euro system will collapse or will suffer greatly because of Greece.”

Greek officials are trying to convince investors they can cut the nation’s budget deficit, which at 12.7 percent of gross domestic product was Europe’s largest in 2009. The government last week announced spending cuts and tax increases totaling 4.8 billion euros ($6.5 billion), the third round of austerity measures this year.

French President Nicolas Sarkozy said on March 7 the 16- nation euro region must support Greece, which has more than 20 billion euros of debt falling due in April and May, or risk destroying the currency. German Chancellor Angela Merkel, who runs Europe’s largest economy, has so far refused to give the green light to any aid package.

Intervention by European nations to date “was enough” and countries such as Spain and Portugal have “plenty of time” to get their finances in order, said Prodi. As Italian prime minister, Prodi in 1997 introduced a “euro tax” that helped cut Italy’s budget deficit to 2.7 percent of GDP and qualify to join the euro. Italy’s shortfall in 1997 was equivalent to 7 percent of the economy.

What’s a US Dollar Worth? : The Fed, Money as Debt

IRA Goes Off The Rails – Mark To Market

Posted by Karl Denninger

In what I can only describe as a self-serving piece for keeping banking “exactly as it is” (which is inherently unsustainable and thus can’t be) IRA tries to refute the value of mark-to-market with a stunning piece.

Finally, on April 2, 2009, FASB allowed banks to use “cash flow” to value bonds when the market was illiquid – exactly like Bernanke said last week. This fixed the immediate problems in the system, and the economy and financial markets have been on the mend ever since. In fact, the stock market bottomed on March 9, 2009 – the very day markets found out that Representatives Barney Frank and Paul Kanjorski would hold a hearing to force FASB to change the misguided accounting policy.

No it didn’t.

1. Remember FHLB Seattle again? Their “at market” losses on a portfolio of trash, er, loans was some $300 million.  They claimed that the real loss to be realized over time was in fact $12 million, using model-based accounting.  After all, these loans, while deeply underwater, weren’t really impaired.

Or so they told Congress.  I remember the testimony well.

But now, one year later, they are suing the banks that packaged up all this dog squeeze.  Among the pieces of trash being sued over are the very same securities against which they said that a model-based valuation system showed a tiny $12 million loss.

Are they suing for $12 million?

No.

That “tiny $12 million loss” in fact is some $311 million – almost exactly what the market price predicted it would be.

Soros, Goldman, Hedge Funds Attack Greece, Euro

Financial Warfare Exposed – Soros, Goldman Sachs,
Hedge Funds Attack Greece To Smash Euro

By Webster Tarpley
3-4-10

It has been evident for some time that the ongoing speculative attack on Greece, along with such other countries as Spain, Ireland, Portugal, and Italy, was not primarily a reflection of their economic fundamentals, nor yet a spontaneous movement of “the market,” but rather an orchestrated action of economic warfare. The dollar had been relentlessly falling through the late summer and autumn of 2009. It obviously occurred to various Anglo-American financiers that a diversionary attack on the euro, starting with some of the weaker Mediterranean or Southern European economies, would be an ideal means of relieving pressure on the battered US greenback. Since these degenerate elites are incapable of directly solving the problem of the dollar through increased production, full employment, and economic recovery, one of the few alternatives remaining to them is to create a situation in which the euro is collapsing faster, leaving the dollar as the beneficiary of some residual flight to quality or safe haven reflex.

Smart Grid: The Implementation of Technocracy?‏

By Patrick Wood, Editor
March 2, 2010
Introduction

According to the United Nations Governing Council of the UN Environmental Programme (UNEP), “our dominant economic model may thus be termed a ‘brown economy.” UNEP’s clearly stated goal is to overturn the “brown economy” and replace it with a “green economy”:

“A green economy implies the decoupling of resource use and environmental impacts from economic growth… These investments, both public and private, provide the mechanism for the reconfiguration of businesses, infrastructure and institutions, and for the adoption of sustainable consumption and production processes.” [p. 2]

Sustainable consumption? Reconfiguring businesses, infrastructure and institutions? What do these words mean? They do not mean merely reshuffling the existing order, but rather replacing it with a completely new economic system, one that has never before been seen or used in the history of the world.

This paper will demonstrate that the current crisis of capitalism is being used to implement a radical new economic system that will completely supplant it. This is not some new idea created in the bowels of the United Nations: It is a revitalized implementation of Technocracy that was thoroughly repudiated by the American public in 1933, in the middle of the Great Depression.

The Technocrats have resurfaced, and they do not intend to fail a second time. Whether or not they succeed this time will depend upon the intended servants of Technocracy, the citizens of the world.

Indeed, the dark horse of the New World Order is not Communism, Socialism or Fascism. It is Technocracy.

Unsustainable Deficits and Bond Boycotts: Panic at the Fed or Back to Financial Normalcy?…

By F. William Engdahl

Global Research, February 24, 2010

The decision of the US Federal Reserve to raise its key interest rate was definitely not a sign of confidence in the US economic recovery or a signal that Fed policy is slowly returning to normal as claimed. It was rather a signal of panic over the weakness in US Government bond markets, the heart of the dollar financial system.

Financial markets have reacted with jubilation, by buying dollars and selling Euros, at the decision by the Fed to raise rates for the first time since 2006 for its so-called Discount Rate, going from 0.5% to 0.75%. The Discount Rate is the interest rate charged for banks to borrow from the central bank. At the same time the Fed left its more important short-term Fed Funds rate unchanged and historically low — between 0.0% and 0.25%. In its official statement the Board of Governors said the rate move was intended to push private banks back into the private inter-bank borrowing market and away from reliance on Federal Reserve subsidized money which had been provided since the financial crisis began in August 2007.

Week ending Feb 20…

GLOBAL GLASS ONION

by rjs

Federal Reserve Balance Sheet Update: Week Of February 18 – New Records In Total Assets And Excess Reserves - The Federal Reserve’s balance just hit another record high, at $2.29 trillion, jumping by a whopping $54 billion sequentially (the biggest weekly increase since mid-November).

• Securities held outright: $1,967 billion (an increase of $60.9 billion MoM, resulting from $56 billion increase in MBS and $5 nillion in Agency Debt), or a huge $53.6 billion increase sequentially. The fed is now 95% complete with its purchases of MBS, and 96% complete with purchases of Agencies. The Fed has completed $167.2 billion of its $175 billion agency debt purchase program through February 17. The Fed’s MBS total is now $1.188 trillion, and by the end of the first quarter of 2010, the Fed will have purchased $1.25 trillion.
• Net borrowings: $127 billion. The monetary base increased by $50 billion in the past fortnight to $2.06 trillion. The ratio of total assets to Monetary Base remained constant at 1.08x, elevated from the historical ratio of 1.00x.
• Float, liquidity swaps, Maiden Lane and other assets: $194 billion. The CPFF program was at $7.7 billion.  FX liquidity swaps are now non-existent.

Fed: we need to shrink our balance sheet, but how? – The Federal Open Market Committee released the minutes of the Jan 26-27 session on Wednesday. The meeting minutes revealed disagreement — or at the very least, debate — over the nature and timing of any moves to reduce the size of the Federal Reserve balance sheet. …staff noted that the Committee might want to address both the eventual size of the Federal Reserve’s balance sheet and its composition. Policymakers were unanimous in the view that it will be appropriate to shrink the supply of reserve balances and the size of the Federal Reserve’s balance sheet substantially over time. Moreover, they agreed that it will eventually be appropriate for the System Open Market Account to return to holding only securities issued by the U.S. Treasury, as it did before the financial crisis. Several thought the Federal Reserve should hold, eventually, a portfolio composed largely of shorter-term Treasury securities…

Bernanke on the Fed’s balance sheet - (charts) Federal Reserve Chair Ben Bernanke last week released a statement of how the Fed intends to manage its bloated balance sheet over the next few years. Here I offer my interpretation of what his plan involves. Bernanke drew a distinction between three different categories of assets that the Federal Reserve has held on its balance sheet. The first involve extension of short-term emergency credit to financial institutions: This lending came in the form of a wide variety of new facilities, which summed to almost $1.6 trillion by the end of 2008, but are now almost entirely wound down or phased out, as Bernanke observed:

Gerald Celente: The Global Financial System Is Collapsing: Get Ready For War!

Getting ready for war???…
~jude