looting the banking system - russ winter's take

[jk]

i thought today's posting at russ winter's blog was interesting enough to share. emphasis added


Sheet Sandwiches for the Old, Money Tree for the New?

Monday, July 14th, 2008 at 8:27 AM
As I have suggested in Thursday’s podcast and my recent posts the first equity infusion Band-Aid for Freddie and Fannie has materialized and as quickly as I had predicted. The details and price levels are a bit unclear, but there are stories running that Hank Paulsen wants the GSEs shareholders to eat a sheet sandwich. The Hail Mary trading in Fannie and Freddie this morning therefore looks suspect, thus setting up the prospect for one more failed rally attempt going into bank earning report this week and next. We will see some kind of capitulation phase developing, we were close to it last week. I also believe these GSE institutions will need more capital, but this may now actually come from favored private Capos and Associates, not the Government.

There appears to be a formula being applied of giving out sheet sandwiches for “old” equity shareholders, and implied guarantees for the new ones. This is entirely consistent with my six month looting countdown scenario mentioned in recent posts. If successful this operation will effectively involve the pattern seen with Bear Stearns and the GSEs of corrupt and influenced peddled government institutions working as “facilitators” to transfer ownership. I believe an incredibly large amount of American assets and economic capacity will pass fairly quickly into the hands of Pig Men interests before Bush leaves office. There is going to be a massive unprecedented rearrangement of the money tree.

The actual ownership will be largely foreign as America is colonialized. Pig Men serve as guides and front men (to get around obstacles to foreign ownership), collecting massive fees along the way. Just which Pig Men benefit from the bulk of this action is a little dicey as some of the old group of investment firms will also be sacrificed up. It is important to realize that no firm is immune to eating a sheet sandwich. All that has to happen is for the same cast of characters to show up in new firms, spin offs, or reconstituted “private equity” organizations dressed in new clothes. So don’t be too hung up on “Citigroup” or “Goldman Sachs” monikers per se. It may be somebody like Blackstone Group serving this looting function, just follow the action and take note of the players involved, that’s your bouncing ball. The successful ones have ties to where the money is: sovereign wealth funds and foreign central banks. Twin deficits of $100 billion a month flowing to the foreigner coffers, gives this casts of characters lots to work with. Oil at $145 accelerates the process. Then in 2009 watch where Hank Paulsen and George Bush end up.

The mainstream media has been running some poor quality stories about the next bank failures. About the only one that gave some input was this one quoting a list based on March data from Richard Bove giving the standard Texas Ratio for sick banks. Three banks were mentioned that had rather astonishing non performing asset percentages that prompt the obvious question such as “why haven’t these banks been closed?”. Downey had a NPA of 13.9%, CORS 13.2%, and Doral 12.8%. You will see those in the headlines soon enough.

Also of note are statistics on the FDIC’s balance sheet which will take a $4-8 billion hit from IndyMac. If this credit debacle is 1990 times two or three, then you can see the potential comparison this time around. In 1990-1992, the FDIC exhausted it’s insurance reserve. Scroll to Combine Ins Dep Fund for the key data.

http://wallstreetexaminer.com/blogs/...1773#more-1773

[bill]

Re: looting the banking system - russ winter's take

All that has to happen is for the same cast of characters to show up in new firms, spin offs, or reconstituted “private equity” organizations dressed in new clothes. So don’t be too hung up on “Citigroup” or “Goldman Sachs” monikers per se. It may be somebody like Blackstone Group serving this looting function, just follow the action and take note of the players involved, that’s your bouncing ball. The successful ones have ties to where the money is: sovereign wealth funds and foreign central banks. Twin deficits of $100 billion a month flowing to the foreigner coffers, gives this casts of characters lots to work with. Oil at $145 accelerates the process. Then in 2009 watch where Hank Paulsen and George Bush end up.

said it over a year ago!
http://www.itulip.com/forums/showthr...10152#poststop

petro SWF reserves
http://online.barrons.com/article/SB...lenews_barrons

MONDAY, JULY 14, 2008

FEATURES MAIN

Bountiful Barrels: Where to Find $140 Trillion

By ANDREW BARY | MORE ARTICLES BY AUTHOR
The wealth transfer to oil-exporting countries will change the world.

will Obama change the deal?
http://www.bloomberg.com/apps/news?p...Et0&refer=home

July 14 (Bloomberg)
``I am concerned if these sovereign wealth funds are motivated by more than just market considerations,'' Obama said in February. ``We are over time transferring wealth to those countries, and that's something I intend to stop as president.''

http://www.telegraph.co.uk/money/mai...3/cnswf113.xml

Sovereign wealth funds debate disclosure rules


By Louise Armitstead

Last Updated: 1:30am BST 13/07/2008

An insider in Singapore last week said: "The process is extremely hard. There are 23 countries involved; each fund has developed at different times and in different ways. You've got old timers, such as GIC, the Singaporean fund, along with Botswana. It's hard work."
Other people warned not to expect too much. One said: "The SWFs don't believe they are doing anything wrong, so many believe nothing should change."

[jk]

Re: looting the banking system - russ winter's take

hard to see how obama makes good on his intention to stop the transfer of wealth abroad unless he makes a big deal about both conservation and finding alternative sources of energy.

[GRG55]

Re: looting the banking system - russ winter's take

i thought today's posting at russ winter's blog was interesting enough to share. emphasis added


Sheet Sandwiches for the Old, Money Tree for the New?

Monday, July 14th, 2008 at 8:27 AM
As I have suggested in Thursday’s podcast and my recent posts the first equity infusion Band-Aid for Freddie and Fannie has materialized and as quickly as I had predicted. The details and price levels are a bit unclear, but there are stories running that Hank Paulsen wants the GSEs shareholders to eat a sheet sandwich. The Hail Mary trading in Fannie and Freddie this morning therefore looks suspect, thus setting up the prospect for one more failed rally attempt going into bank earning report this week and next. We will see some kind of capitulation phase developing, we were close to it last week. I also believe these GSE institutions will need more capital, but this may now actually come from favored private Capos and Associates, not the Government.

There appears to be a formula being applied of giving out sheet sandwiches for “old” equity shareholders, and implied guarantees for the new ones. This is entirely consistent with my six month looting countdown scenario mentioned in recent posts. If successful this operation will effectively involve the pattern seen with Bear Stearns and the GSEs of corrupt and influenced peddled government institutions working as “facilitators” to transfer ownership. I believe an incredibly large amount of American assets and economic capacity will pass fairly quickly into the hands of Pig Men interests before Bush leaves office. There is going to be a massive unprecedented rearrangement of the money tree.

The actual ownership will be largely foreign as America is colonialized. Pig Men serve as guides and front men (to get around obstacles to foreign ownership), collecting massive fees along the way. Just which Pig Men benefit from the bulk of this action is a little dicey as some of the old group of investment firms will also be sacrificed up. It is important to realize that no firm is immune to eating a sheet sandwich. All that has to happen is for the same cast of characters to show up in new firms, spin offs, or reconstituted “private equity” organizations dressed in new clothes. So don’t be too hung up on “Citigroup” or “Goldman Sachs” monikers per se. It may be somebody like Blackstone Group serving this looting function, just follow the action and take note of the players involved, that’s your bouncing ball. The successful ones have ties to where the money is: sovereign wealth funds and foreign central banks. Twin deficits of $100 billion a month flowing to the foreigner coffers, gives this casts of characters lots to work with. Oil at $145 accelerates the process. Then in 2009 watch where Hank Paulsen and George Bush end up.

The mainstream media has been running some poor quality stories about the next bank failures. About the only one that gave some input was this one quoting a list based on March data from Richard Bove giving the standard Texas Ratio for sick banks. Three banks were mentioned that had rather astonishing non performing asset percentages that prompt the obvious question such as “why haven’t these banks been closed?”. Downey had a NPA of 13.9%, CORS 13.2%, and Doral 12.8%. You will see those in the headlines soon enough.

Also of note are statistics on the FDIC’s balance sheet which will take a $4-8 billion hit from IndyMac. If this credit debacle is 1990 times two or three, then you can see the potential comparison this time around. In 1990-1992, the FDIC exhausted it’s insurance reserve. Scroll to Combine Ins Dep Fund for the key data.

http://wallstreetexaminer.com/blogs/...1773#more-1773

Remember that short period late in the Drexel Burnham/Michael Milken era of the 1980's where it was suspected that a few management teams, apparently thinking they weren't being adequately compensated [this was before perpetually repriced stock options were common], seemingly deliberately ran their companies into the ground, and then miracle of miracles, engineered a management-led LBO to acquire the assets cheap?

Same game, only now we live in a globalized world...

[metalman]

Re: looting the banking system - russ winter's take

Remember that short period late in the Drexel Burnham/Michael Milken era of the 1980's where it was suspected that a few management teams, apparently thinking they weren't being adequately compensated [this was before perpetually repriced stock options were common], seemingly deliberately ran their companies into the ground, and then miracle of miracles, engineered a management-led LBO to acquire the assets cheap?

Same game, only now we live in a globalized world...

you canadians with your pre-conceived notions of usa corruption. but can you handle our tough questions about canada? how about this?

Do buildings in Canada have doors you can open to get inside?

In the USA you can get inside a building by opening a door, unless it's locked with a chain or key or electronic keycard. This makes it so you don't have to break down a wall to enter or exit a building.

In Canada, do buildings have doors also? Or do you need a hammer to get inside a building? Or do you use an acidic lemon to melt the walls? How is it in Canada?

well?

[GRG55]

Re: looting the banking system - russ winter's take

you canadians with your pre-conceived notions of usa corruption. but can you handle our tough questions about canada? how about this?

Do buildings in Canada have doors you can open to get inside?

In the USA you can get inside a building by opening a door, unless it's locked with a chain or key or electronic keycard. This makes it so you don't have to break down a wall to enter or exit a building.

In Canada, do buildings have doors also? Or do you need a hammer to get inside a building? Or do you use an acidic lemon to melt the walls? How is it in Canada?

well?

I came to the conclusion that the most credible way to respond to this query was to refer to the experiences of celebrity docu-do-gooder, Michael Moore. Although the following may generate controversy about frequency of deadbolt usage, it leaves no doubt that there are doors in Canada.

From Wiki:

Manufacturing Dissent is a 2007 documentary that asserts that filmmaker and polemicist Michael Moore has used misleading tactics. The documentary exposes what the creators say are Moore's misleading tactics and mimics Moore's style of small documentary makers seeking and badgering their target for an interview to receive answers to their charges. The film was made over the course of two years by Canadians Debbie Melnyk and Rick Caine after they viewed Fahrenheit 9/11, Moore's controversial film attacking the Bush administration and its policies.^[1] Melnyk and Caine have stated that when they first sought to make a film about Moore, they held great admiration for what he had done for the documentary genre and set out to make a biography of him. During the course of their research, they became disenchanted with Moore's tactics.^[2] The title is a pun on the title of the book Manufacturing Consent: The Political Economy of the Mass Media by Edward S. Herman and Noam Chomsky, and the film it inspired, Manufacturing Consent: Noam Chomsky and the Media...

...Another one of their assertions is that in Moore's Academy Award winning film Bowling for Columbine, Moore misleads the audience in describing the safety Canadians feel in their homes because guns are more regulated in their country than in the United States. In the film, Moore goes door-to-door in Sarnia, Ontario testing to see if the front doors are locked or unlocked. Moore edits the film to show every home he tries with an unlocked door. According to Manufacturing Dissent, Moore's producer for the segment told them that in reality about 40 percent of the homes had unlocked doors.^[4]

Now if you'll please excuse me as I have to go feed the sled dogs...

P.S. The traditional Canadian home, an igloo, has an entry portal but no door. Maybe that's how the confusion arose?

Also there is no truth to the rumour that Canadians take their front doors with them so they feel more at home when going canoeing and fur trapping.

[metalman]

Re: looting the banking system - russ winter's take

I came to the conclusion that the most credible way to respond to this query was to refer to the experiences of celebrity docu-do-gooder, Michael Moore. Although the following may generate controversy about frequency of deadbolt usage, it leaves no doubt that there are doors in Canada.

From Wiki:

Manufacturing Dissent is a 2007 documentary that asserts that filmmaker and polemicist Michael Moore has used misleading tactics. The documentary exposes what the creators say are Moore's misleading tactics and mimics Moore's style of small documentary makers seeking and badgering their target for an interview to receive answers to their charges. The film was made over the course of two years by Canadians Debbie Melnyk and Rick Caine after they viewed Fahrenheit 9/11, Moore's controversial film attacking the Bush administration and its policies.^[1] Melnyk and Caine have stated that when they first sought to make a film about Moore, they held great admiration for what he had done for the documentary genre and set out to make a biography of him. During the course of their research, they became disenchanted with Moore's tactics.^[2] The title is a pun on the title of the book Manufacturing Consent: The Political Economy of the Mass Media by Edward S. Herman and Noam Chomsky, and the film it inspired, Manufacturing Consent: Noam Chomsky and the Media...

...Another one of their assertions is that in Moore's Academy Award winning film Bowling for Columbine, Moore misleads the audience in describing the safety Canadians feel in their homes because guns are more regulated in their country than in the United States. In the film, Moore goes door-to-door in Sarnia, Ontario testing to see if the front doors are locked or unlocked. Moore edits the film to show every home he tries with an unlocked door. According to Manufacturing Dissent, Moore's producer for the segment told them that in reality about 40 percent of the homes had unlocked doors.^[4]

Now if you'll please excuse me as I have to go feed the sled dogs...

at least that have doors. that's a relief.

i thought the question was nutty and tried to find a way to work it in. thanks.

p.s. moore is to true journalists as poodles are to sled dogs.