xxx

Harvey Organ, Wednesday, April, 13 2011

xxx

 

Carl Levin To Refer Goldman To Justice Department, SEC For Misleading Investors And Committing Perjury

Submitted by Tyler Durden on 04/13/2011 20:23 -0400

Yesterday JPMorgan, today Goldman (again) and Deutsche Bank. Following the completion of a two-year report by the Senate Permanent Subcommittee of Investigations into the role of Goldman and other banks in the housing collapse, the FT reports that  "US Senate investigators probing the financial crisis will refer evidence about Wall Street institutions including Goldman Sachs and Deutsche Bank to the justice department for possible criminal investigations, officials said on Wednesday." According to Carl "Shitty Deal" Levin, head of the subcommittee, "banks mis-sold mortgage-backed securities and misled investors and lawmakers. “We will be referring this matter to the justice department and to the SEC [Securities and Exchange Commission],” he said. “In my judgment, Goldman clearly misled their clients and they misled Congress.” Bloomberg further clarifies: "At a briefing today, Levin said he believed Goldman Sachs executives weren’t truthful about the company’s transactions in testimony before the subcommittee at an April 2010 hearing. He said he would refer the testimony to the Justice Department for possible perjury charges...In my judgment, Goldman clearly misled their clients and they misled the Congress.” Levin said. And Deutsche Bank's Greg "I am short your house" Lippmann was not spared either: "Republicans and Democrats signed off on the report, which said Greg Lippmann, Deutsche’s top CDO trader, referred to assets underlying the securities as “crap” and “pigs” at the same time as his bank was selling them to clients. Prior to the crisis, Mr Lippmann built a short position in CDOs, betting that they would fall in value, even though Deutsche had a large long position on the securities." Just more smoke and mirrors? Or are we getting to a critical mass where even the very corrupt judicial system will have to respond?

 

Imaginary gold, silver, and copper to trade on Singapore exchange

 

Institutions way under-invested in gold, Rickards tells King World News

 

TEPCO Confirms Reactor 4 Spent Fuel Pool Is Now An Uncontrolled, Open Air Fission Process

It had been a while since we had a factual update (as opposed to just lies and spin) from Fukushima. Courtesy of Kyodo, we now know that what was speculated by some as true, and rebutted by most as mere scaremongering, is in fact, fact. "Some of the spent nuclear fuel rods stored in the No. 4 reactor building of the crisis-hit Fukushima Daiichi power plant were confirmed to be damaged, but most of them are believed to be in sound condition, plant operator Tokyo Electric Power Co. said Wednesday." Naturally, in one month we will learn that most of them are damaged, and in two months, that each and every one has been demolished. "The firm known as TEPCO said its analysis of a 400-milliliter water sample taken Tuesday from the No. 4 unit's spent nuclear fuel pool revealed the damage to some fuel rods in such a pool for the first time, as it detected higher-than-usual levels of radioactive iodine-131, cesium-134 and cesium-137." In a tremendously ironic development, the No. 4 reactor, halted for a regular inspection before last month's earthquake and tsunami disaster, had all of its 1,331 spent fuel rods and 204 unused fuel rods stored in the pool for the maintenance work. Unfortunately, the entire pool ended up being damaged following the quake and the subsequent explosion, in essence nullifying any protection that the containment dome would have provided. As the picture from the Asahi Shimbun below shows, the damage from overhanging structures which have subsequently fallen into the fuel pool likely means that there could well be an uncontrolled, if weak, fission reaction currently going on in the reactor 4 SFP (where the water temperature is currently 90 degree) completely unprotected by the elements.

 

Presenting John Paulson's Complete Les Echos Interview In Which He Is Bearish On Housing, Bullish On Gold

Submitted by Tyler Durden on 04/13/2011 17:47 -0400

Two days ago John Paulson had an extended interview with Les Echos which however received little coverage in the US, supposedly since the interview was in French, and also because it was behind a paywall. Since the interview does provide some incremental perspectives by Paulson, it is useful to recreate it in its entirety. Specifically, Paulson is now far more bearish on US housing, blaming it on FrankenDodd, and he continues to be as bullish as ever on gold. To wit: "Over time, the price of gold will rise in proportion to the creation of paper dollars. In an inflationary environment where the demand for protection increases, the price of gold can rise even further. Historically, gold has always been a safe haven against inflation and a safe haven in times of political instability. Today we face both risks." As for whether or not we will have QE3: Paulson is not the guy to ask. He is as confused as the Fed presidents. 

And Now For Tonight's Prime Time Event: The Durbin-Dimon Smackdown

Submitted by Tyler Durden on 04/13/2011 18:20 -0400

Some time ago Ben Bernanke's right hand man (and it certainly goes both ways), better known as the guy who is the gatekeeper to the entire shadow banking system, Jamie Dimon railed against debit interchange fees, claiming they are "counterproductive", represent "price fixing at its worst" and are "downright idiotic." Dick Durbin, who introduced the interchange fees amendment responds in kind.  "I recognize that Chase will likely see decreased revenue from interchange reform, but I urge you to keep some perspective. Last year Chase had $17.4 billion in profits — up 48 percent from the previous year - and a 15 percent profit margin. Your own personal compensation "jumped nearly 1,500 percent to $20.8 million in 2010" according to Reuters. In contrast, middle-class American families are struggling to get by in a tough economy — an economy that went south because of the banking industry's unregulated excesses. There is no need for you to threaten your customers with higher fees when you and your bank are already making money hand-over-fist. And there is no need to make such threats in response to reform that simply tries to spare consumers from bearing the cost of interchange fees that are anticompetitive and unreasonably high...In the coming weeks I am confident the Fed will produce a reasonable set of reforms that will enhance the efficiency, competitiveness and fairness of the debit system. This will neither be "counterproductive" nor "idiotic." It will be good news for all Americans." Poor Dick apparently does not know that you don't call out Jamie's BS - it only leads to exponential escalation in the M.A.D. doctrine until Jamie finally blows his top and threatens the world with an extinction level event if the ROI for his "shareholders" does not grow by at least 100% Y/Y? But at least this response does set the precedent that someone voicing an opinion contrary to that of JP Morgan does not lead to a horde of satanic demons flying out of a hole in the ground and dragging the offender deep into the bosom of Hades.

Charting The Roundtrip In Q1 GDP Forecasts

Submitted by Tyler Durden on 04/13/2011 16:16 -0400

Remember when back on December 1, Goldman's Jan Hatzius issued its "revolutionary" bullish economy report which contained the following line "This outlook represents a fundamental shift in the thinking that has governed our forecast for at least the last five years" (and which was appropriately ridiculed by ZH :"This is unfortunate. Jan Hatzius used to have credibility"), starting a frenzy across Wall Street when one after another the econolemmings confirmed that bubble mania is alive and well, desperate to hike their own irrelevant GDP numbers as quickly as possible? After all Goldman had just given them the green light to do so. That the hike was based on something as transitory as a payroll tax fiscal stimulus and an ongoing (and allegedly soon ending) monetary stimulus in the form of QE2 was irrelevant: the Russell 2000 was up, meaning the economy was improving. Well, Jan redeemed himself realizing once again first, ahead of the crowd of idiots, that everything is about to go to hell, by downgrading Q1 GDP ahead of everyone else (naturally to be followed by the stampeding herd of lemmings - here's looking at you Joe LaVorgna and whoever the Barclays economist is, if they can even afford one - once again). But anyway since the first sentence was a question, if the answer is no, below we recreate the history of Q1 GDP forecasts by Wall Street's intellectual brigade. We will not point out the roundtrip, or put into question the relevance of the "economist" occupation on Wall Street. It is rather self-explanatory.

Contrary To Previous Lies, Greece May Not Be Able To Access Capital Markets After All; Likely To See 50% Creditor Haircuts

Submitted by Tyler Durden on 04/13/2011 14:48 -0400

Following the just completed teleprompted preaching of concentrated, yet inverse, truthiness, we find that yet another bankrupt country has in fact been lying about its economic prospects. Following the recent stunning disclosure out of Portugal that contrary to constat promises to the contrary the country was in fact, broke, now we get another admission, this time from a country already bankrupt. Per the FT: "Greece needs time to convince international investors about its reform programme and may not be able to return to financial markets next year as planned, its finance minister has admitted. Greece’s budget plans are fully funded this year but Athens will have to raise between €25bn-€30bn on financial markets in 2012 – a step that would mark the first stage of its international rehabilitation. But Mr Papaconstantinou suggested that goal was in doubt and the timetable would not become clearer until an EU-IMF agreement had been struck for Portugal, the latest victim in the eurozone debt crisis. “A judgment cannot be made before the summer and before Portugal closes its deal,” he said." So now it is trendy for one broke country to bash another broke country? In retrospect Greece should have a right of first refusal of bailout funding: after all it first (was forced to) disclose its bankruptcy. Surely there should be some brownie points for that. But all this may well be moot: Germany is now openly saying the need for a Greek restructuring is coming. Which means that senior creditor haircuts (supposedly up to 50-60%) are imminent.

Goldman's Take On Obama's Latest Budgetary "Promises"

Submitted by Tyler Durden on 04/13/2011 15:14 -0400

The president has released a budget proposal that goes beyond his budget proposal for fiscal year (FY) 2012. The most important new items are a “debt trigger” that would result in across-the-board cuts in spending and tax credits/deductions if debt/GDP goals are not reached, additional reduction in defense and non-defense discretionary spending and an endorsement of additional entitlement reductions. In most cases, the proposal outlines savings only at a high level.

Libya: All About Oil, or All About Banking?