Will BAC's Moynihan Pull The CFC Bankruptcy Bazooka?

Just as we had suspected, Bloomberg is now reporting that BofA has gone all M.A.D. on the hand-that-feeds by leaving the possibility of bankruptcy for its trade-of-the-decade, accretive-within-a-year, coulda-been-a-contender business unit Countrywide Financial Corp. The entity remains a separate legal entity under the BAC capital structure with $3.8bn of direct Senior Unsecured and Senior Subordinated debt and an aggregate exposure around $6.5bn from all the sub-entities under the CFC entity. Of course, threatening the use of this legal route will not be a tidy process and will likely bring in doubt the rest of BAC's capital structure to a greater or lesser degree and is unlikely to bode well for BAC's capital market access and trading partners - but perhaps that won't be a problem once the FDIC's living wills are in place.

 

 

Euro Collapse Could Lead to War: Polish FinMin

A collapse of Europe's monetary union would likely lead to a breakup of the European Union as a whole, posing significant risks to the region and even raising the possibility of war in the long term, Poland’s Finance Minister told CNBC.

 

 

Risk Transfer Has Begun As Germany Net Notional Overtakes Spain

The last two weeks have been full of headlines regarding the volatility and decompression of sovereign spreads around the world. What has been more intriguing to us than day-after-day of discussing Greek 2Y yields or French 5Y CDS has been the relative increases in net notional credit protection outstanding on Germany. The German credit worthiness and sovereignty stands at the heart of any solution to the crises in the Euro-zone and it appears market participants are increasingly pricing in that risk transfer. This is exactly the same transmission we saw in the US when the Fed/TSY announced day-after-day of acronym-laden support mechanisms and shouldered more and more of the private balance sheet risk. This week, both Brazil and Germany overtook Spain in terms of net notional CDS outstanding.

 

 

Moody's Puts UBS On Downgrade Review Due To "Weakness In Risk Controls"

Market sentiment is now instantaneously lurching from one opposite to another with each consecutive headline, infused with the grace of a drunk and high Berlusconi in an American Apparel store: the schizopanic is becoming unbearable for anyone who still has their own money in the market. Futures are closed for 10 more minutes, but since the logical response to this news would be a major drop, we propose that a huge spike in futures will follow on implied certainty that Europe will be forced to pull an "America" and dump several trillion euro in taxpayer funds to recapitalize its banks. And following in America's footsteps, look for the start of Mutual Assured Destruction rhetoric out of Eurocrats as soon as this evening.

Treasury Inspector General Opens Probe Into Obama's Solargate

In the latest installment of what is rapidly becoming Obama's Keynesian Solargate, we learn that the Treasury Department's Inspector General has opened an investigation of the now defunct $528 million government loan to Solyndra which has no chance of getting repaid, following what will be a pennies on the dollar liquidation of the company, especially since it is primed by a $75 million term loan to George Kaiser, a documented Obama "bundler" as was documented previously. Per the AP, "A spokesman said Thursday that the inspector general is reviewing the role and actions of the Federal Financing Bank, a government corporation supervised by the Treasury Department. The bank provided the low-interest loan to the Fremont, Calif.-based company." The "concern" is that Obama has pushed levers to get the investment in a venture controlled by a "friend" on a fasttrack, with the White House Office Of Management Supervision urging the DOE to release the funds without proper diligence. "The House energy committee released documents Wednesday that appeared to show senior staff at the White House Office of Management and Budget chafing about having to conduct "rushed approvals" of a loan guarantee for Solyndra. Republican members of the committee said the emails raised questions about whether the loan was rushed to accommodate a Solyndra groundbreaking ceremony in September 2009 that featured Vice President Joe Biden and Energy Secretary Steven Chu." And while there is more, we will spare the Treasury IG some time (assuming he is at least a little less corrupt than everyone else in the administration and actually plan on conducting a legitimate investigation) and advise him to simply look at campaign and other contributions by Solyndra's equity backers which features the George Kaiser Family Foundation, U.S. Venture Partners, CMEA Ventures, Redpoint Ventures, Virgin Green Fund, Madrone Capital Partners, RockPort Capital Partners, Argonaut Private Equity, Masdar and Artis Capital Management. When in doubt, always follow the buck... especially when it is looking for a very fast turnaround courtesy of taxpayer capital IRR padding.

Another Popular Name Emerges In The Solyndra Scandal

This scandal is rapidly becoming the gift that keeps on giving...

Futures Jump On Second Global Bailout Announcement On Lehman's Third Bankruptcy Anniversary

Strawman-of-the-night: G7 OFFICIAL SAYS EUROPEAN GOVS WEIGHING TALF-LIKE PGM: CNBC.

RIMMberrr II - The Playbook Strikes Back

Like any good sequel, RIMM's earnings tonight did not disappoint (those looking for a disaster flick). Expectations were high (low), but we all suspected that it might not quite live up to the pre-quel, same actors and three months later. Well the reviews are in and RIMMberrr II is a winner -18.5% (beating the measly -14.5% initial reaction in the prior release).

Barack Obama For Sale: 50% Off

The following email intercept from a senior Managing Director of Obama bastion Evercore (Roger Altman: nuf said), explains all there is to know about  the Obama presidency, but it does not explain why Groupon still does not have a "meet your president, half off price" coupon yet. "Hi there - fundraising this quarter has been a struggle (as you can imagine give all the negative stuff around the President) - they are offering a one off opportunity to attend this small dinner on Monday for $25k instead of the full max out of $38.5k, or a couple at $38.5k instead of $77k.  Just wanted to offer that in case you're interested!" Anyway, we'll got and report ourselves to @AttackWatch immediately as this is obviously a non-subversive counter-disinformation campaign.





UBS and THE Big Trade?

Posted by : thetrader

Post date: 09/15/2011 - 16:08

2 BN USD is quite some money. In order to blow up such a sum, you need to accumulate some fairly big positions. In Equities, almost impossible, in currencies, more likely. Could THE trade have been a...

The BoomBustBlog BNP Paribas "Run On The Bank" Model Available for Download

Posted by: Reggie Middleton

Post date: 09/15/2011 - 14:23

The BNP Paribas "Run On The Bank" Model is now available for download, absolutely free. Why don't you see for yourself if France's 2nd largest bank needs capital or is in risk of a bank run - using...

Harvey Organ, Thursday, Sept 15, 2011

Gold and Silver Raid because of Massive Dollar Liquidity Aid to Europe

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 36 minutes ago

Good evening Ladies and Gentlemen: Gold closed today down $45.00 to $1778.50 with silver also falling to the tune of $1.02 to $39.45. The bankers knew that the USA and all major central banks were orchestrating a massive dollar injection into Europe as the European banks were strapped for dollars.  The dollars are scarce due to the unwinding of all of the yen carry trades and dollar carry trades

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In The News Today

September 15, 2011, at 1:53 pm
by Jim Sinclair in the category In The News |  Print This Post |  Email This Post

Jim Sinclair’s Commentary

Words from Master Kenny:

"If gold does hold and bottom from this current support level of 1770 / 1790 – at this point in time, the very near term positive bias just now emerging, may very quickly return to its longer term bull much sooner than many expected."

 

In The News Today

September 15, 2011, at 1:24 pm
by Jim Sinclair in the category In The News |  Print This Post |  Email This Post

Jim Sinclair’s Commentary

The latest from John Williams at www.ShadowStats.com

- Consumer Inflation at Three-Year High
 
- August’s Annual Inflation: 3.8% (CPI-U), 4.3% (CPI-W), 11.4% (SGS)
 
- “Core” Inflation Jumped Again with Some Acceleration
 
- Real Retail Sales Fell 0.3% in August
 
- August’s 0.2% Production Gain Was a 0.1% Loss Against Initial September Reporting

www.ShadowStats.com




Jim Sinclair’s Commentary

The following illustration of economic prediction is spot on for chapter one and two.

Chapter three as described here will occur exactly as anticipated.

Jobless Claims, Inflation Rise, Manufacturing Gets Weaker
Published: Thursday, 15 Sep 2011 | 8:37 AM ET
Applications for unemployment benefits continued to rise in the past week, while inflation pushed higher and a key manufacturing index weakened.
The weekly jobless claims number, which is closely watched as an indicator for employment trends, unexpectedly rose 11,000 to 428,000, well ahead of estimates of 411,000.
The consumer price index, meanwhile, gained 0.4 percent when including volatile food and energy prices, after an increase of 0.5 percent in July. The so-called core CPI, though, gained 0.2 percent, which was in line with expectations.
Consumers paid more for a range of goods and services last month, pushing up inflation and squeezing Americans’ purchasing power.
For the 12 months ending in August, the core index surged 2 percent, the biggest year-over-year increase in nearly three years. That’s at the top end of the Federal Reserve’s informal inflation target. It could limit the central bank’s ability to take further steps to try to revive the economy.
Food prices rose 0.5 percent, the biggest increase since March. That was due to higher prices for cereals and dairy products. Energy costs increased 1.2 percent.

More…

 

 

Jim’s Mailbox

September 15, 2011, at 1:20 pm
by Jim Sinclair in the category Jim's Mailbox |  Print This Post |  Email This Post

ECB to provide banks with dollar loans  
CIGA Eric

Here we go again, QE(n) to infinity on a global scale. Since the problem is not liquidity but rather (failing) debt, capital will continue flow out of Europe into various safe havens. As long as return of capital takes precedence over return on capital, gold will be one of many safe haven destinations.
Headline: ECB to provide banks with dollar loans
FRANKFURT, Germany (AP) — The European Central Bank announced plans Thursday to provide banks with dollars in three medium-term loan operations through the end of this year.
The ECB said it had decided to launch the three-month loans in coordination with the U.S. Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank.
Banking stocks have been hurt recently on fears that they were having trouble getting short-term loans from each other. These central bank loans would relieve that pressure.
Markets and the euro currency were already up before the announcement, but were further buoyed by the news.
Coming on top of mounting hopes that Greece will not be defaulting on its debts anytime soon, the news has helped ease concerns over the impact of Europe’s debt crisis on banking stocks.

Source: finance.yahoo.com

More…





The Real World Is Becoming Expensive For Most Americans  
CIGA Eric

The real world, characterized by inability to eat iPads or other small electronic devices, is growing more expensive each day.
CRBFoodstuffs And Year-over-Year (YOY) Change

Headline: Consumers, restaurateurs feel pinch of rising food prices
Sue Lednicky has been a wary observer of grocery prices’ recent steep climb.
"It’s getting ridiculous to buy food," she said. "It’s painful. I was just complaining about the price of a gallon of milk at the grocery store," where she found 1 percent selling for $3.09.
It’s doubtful Todd Clore would argue.
"In dairy products, the swings have been more dramatic over the past couple of years," said Clore, owner of Todd’s Unique Dining in Henderson. "We used to be in single-digit percentages, where it would go up 5 (percent) to 8 percent. Now, it’s swinging 15 (percent), 20 percent sometimes."
Their statements are borne out by the University of Wisconsin, which reported that the national average price of a gallon of whole milk rose from $3.30 in January to $3.65 in July.

Source: lvrj.com

More…





Hello Jim,

I saw the headline below and thought ‘hmmm, where have we seen this before?’ Someone must be reading your site.
Have a great trip,

CIGA Dan

Gold-Backed Dollar Puts ‘Fair Value’ at $10,000 an Ounce: Chart of the Day By David Wilson – Sep 14, 2011 10:01 PM MT
Gold has the potential to jump more than fivefold as the precious metal’s price catches up with the surging amount of money in the U.S. economy, according to Dylan Grice, a global strategist at Societe Generale SA.
The CHART OF THE DAY shows the price at which each U.S. dollar in the monetary base, compiled by the Federal Reserve, would have been backed by an ounce of gold for the past half century. International Monetary Fund data on the country’s gold reserves were used in the calculation.
Grice, based in London, identified this price as the metal’s “fair value” yesterday in a report. Since June, it has exceeded $10,000 an ounce, as depicted in the chart’s top panel. Gold for immediate delivery closed at $1,819.63 an ounce on the spot market yesterday.
The bottom panel tracks the value of U.S. gold holdings, based on the spot price, as a percentage of the monetary base for the 50-year period. August’s proportion was 18 percent of the $2.66 trillion in the economy. The latter figure was more than triple the amount three years earlier, reflecting efforts by the Fed to spur economic growth.
More…