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Federal Reserve Merges With BlackRock And J.P. Morgan Fed's 'Loan' For Bear Deal Actually a BlackRock Managed Fund The New York Fed will take, through a limited liability company formed for this purpose, control of a portfolio of assets valued at $30 billion as of March 14, 2008. The assets will be pledged as security for $29 billion in term financing from the New York Fed at its primary credit rate. If there were any gains possible in any future scenario, do we think for even a minute, the pirates would share 100% of it with anyone? Obviously, all they wanted was some DUPE to take up all the LOSSES. This dupe then gets stuck holding the bag while the bag men rush off to rob another bank. These con men have told us for years, they 'earn' their huge fortunes because they 'work hard' and have to 'take risks.' But the instant any risk rears its ugly horned head, they rush off to their home base shelter: the Federal Reserve. Then they are protected from their own losses. How delightful it must be, to be very risky and then be saved every time! And look: the guys who did this to our economic base all get to keep every penny of their loot. The one billion loss JP takes here isn't their money, it is the money of the poor saps who entrusted their funds to JP. The executives get their cut no matter what happens! Seeking Alpha: Specifically, J.P. Morgan is offering financing of $1 billion dollars that is loan-like in one sense - the maximum it will be repaid is its initial investment plus interest ("the primary credit rate plus 475 basis points", currently 7.25 percent) - but equity-like in another sense - J.P. Morgan's billion bears the first loss. Huh? So, if the value of these SIVs don't rise, JP doesn't pay back? What the FFFFFKKKKK???? They only pay us if the funds make them money? Eh? Talk about a deal! Wow. So, if we did this to homeowners, they don't pay the banks back on their mortgages unless and ONLY if the house goes up in value? I once lost $100,000 in a deal during a down market. Perhaps the government should give me back this money with interest. Why should I take any hits like that? Everyone who loses value on their house should stop paying, right? HAHAHA. Talk about bankrupting an entire system! Seeking Alpha: I have a simple question, one to which I think taxpayers deserve a simple answer. Will this new "limited liability company" have contingent liabilities to any parties other than the Fed, J.P. Morgan, and BlackRock for ordinary management fees? Will its portfolio consist of any positions that would make the fund a counterparty, potentially with obligations to pay, not merely rights to receive, future cash? And here it is yet again: the fearful Derivatives Beast from the Gates of Death! Who will ultimately pay for it? We can see that the pirates who created this monster in the last 10 years did so to protect their vast wealth. This dragon was to sit on the golden hoard and protect it. Only they made this dragon bigger than the next 20 years of all the planetary wealth all nations produce. This is pure insanity. And killing this creature means killing the entire US and European banking systems. Totally. This kills all the currencies involved in creating this creature. It means total default on all future wealth which these pirates tried to seize for themselves. Look at how they claw at us to save them! In Götterdammerung, the only way left for the Gods, giants, dwarves and humans can restore the true value of the Ring of Power is to DESTROY THEMSELVES. Brunhilda flings herself on Siegfried's funeral pyre, Valhalla, the entire excuse for all this, burns and crashes, all the gods die and the dwarf is dragged into the deep by laughing Rhinemaidens. The entire four opera series is about how all these characters tried one trick after another to avoid this. Even when the Rhinemaidens beg Loge to tell Wotan, all he has to do is give them back the Ring, he refuses. Because he wanted Valhalla and power! This is all so heartbreaking, actually. Since the people who cooked up this mess are 'fixing' it by cooking up even bigger messes, the people who pay in the end are the small people. They lose in every possible way. And if we were sane and prevented this vast Valhalla of power, palaces and offshore pirate coves to be erected in the first place, there would be no need for a Final Destruction. Lehman's balance sheet isn't shrinking, as we'd expect. Lehman finished the first quarter was total assets of $786 billion, up almost 14 percent from the previous quarter and 40 percent from a year earlier. Other financial institutions are taking down their exposure right now amid the market turmoil to be prudent. Lehman says it wants to. It is not. Lehman got more leveraged, not less. The investment banks "gross" leverage hit 31.7 times equity, up from the fourth quarter and way up from last year's 28.1. According to Brad Hintz, an analyst with Bernstein Research, Lehman's leverage reached its highest point since 2000. Lehman, like all the investment banks, prefers to look at net leverage, excluding hedges, and that went down. And the firm says that the asset rise was mainly a result of increases in short-term items that have low risk. But we've heard a lot of that lately across the financial world. It's quite simple: The more leverage Lehman has, the less room assets have to fall to wipe out its equity. Lehman includes debt in its calculation of equity. Say what? Lehman, instead of having the traditional 10:1 ratio had a 28:1 ratio last year and to keep alive, they went to the Bank of Japan and expanded this to a 32:1 ratio! Soon, they will reach 70:1 and then collapse. But they are already clawing at Wotan, begging Bernanke to please give them a break like JP Morgan got. JP Morgan happens to be one of the world's biggest holders of the value of the Derivatives Beast. Many multiples of trillions of dollars that they don't have, own or have any hope of producing in an emergency. Note also how the Lehman people shoehorn debt into the positive money flow side of the ledger. This is FRAUD. I vividly remember arguments I had with professional financial advisors in the past over the topic, 'Is credit wealth?' I correctly said that ONLY capitalist profit is 'wealth'. Everything else is 'assets' which can shoot up or crash in value. Profits also go up or down but remain 'profits'. One can by assets with profits. But one can only profit off of assets if they inflate. Whereas, profits from capitalism is when it is used with labor, power and machines to create goods which can be exchanged for more than the costs of materials and production. Americans were told for years, it is better to go into debt to use the funds to play markets rather than expanding our value-added industrial base and then enriching the nation via international trade. I know from reading old newspapers that were sufficiently influenced by intelligent reading of Karl Marx, the concept of value-added profit via international trade was understood by ordinary writers. Since the Russian Revolution, the ability to think, talk or understand simple economics has declined in the West, especially in America where it was nearly eradicated. In the East, understanding the need for liberalism caused a collapse in understanding trade and value. In the West. especially in the US, the collapse in understanding economic liberalism has driven us onto the rocks due to the disconnect from leftist understanding of labor and value. So the idea grew in the US, that debt could be leveraged into profits nonstop. This is 'inflationary' thinking. For often, the ONLY way to make profits off of commodities and assets like property is to inflate it by lending money below the inflation rate! Which we see the Fed trying yet again. We know that the sudden deflation in prices will slow down and reverse and go back into inflationary rises once the loans are cheap enough. And that is, when it reached Japanese levels of dishonesty. Federal Home Loan Banks May Buy $150 Billion of Bonds Federal Home Loan Banks were freed to increase their purchase of mortgage-backed bonds by about $150 billion as part of a government effort to pump money back into a market that slumped as the housing crisis deepened. As we slide into a repeat of the Great Depression coupled with the German Weimar Republic, it is interesting that the people who did this to us want to use the last remaining structures build back then as a rescue machine. Fannie Mae, Freddie Mac and Ginnie Mae now hold one tenth of the Derivative Beast's value. This is the basis for the Beast's value, I am guessing? Someone tell me, I am wrong. The US may have $4 trillion in gold value in our vaults but this is due to the gold bubble which seems to be deflating somewhat. So it may be around $3 trillion. The two figures together means we have based this giant protection scheme on these two small rocks. The Derivative Beast, by the way, isn't there to protect US funds here at home. It was created to protect the OFFSHORE entities, I might suggest. So few people understand this matter! This is why I keep reaching back into mythology to explain it! Wagner wrote his Ring cycle during a period of great economic expansion and crashes in Germany and Austria. The final episodes were premiered right when the Long Depression began in 1873, after all. By the way, I like the name, 'Custer Bank.' Gives me a feeling of security! As for the major holder of these trillions in loans, many of which are 'underwater', one of them is Citigroup. These guys are as overstretched and underfunded as all the other guys whose ships are sinking. Of course, the Federal Reserves that holds almost no reserves except for Fort Knox, they can form LLPs with all these guys! Then we should change their name from the Federal Reserve Banks to the Fed Rez LLP. We, the taxpaying public, get to back this with the value of all that we own. Germany did this in 1924. To bring back the value of the reichsmark, they based the new value on the inherent value of all land and all buildings in Germany! This was an expropriation of property, in a sense. For example, the dollar is based on the value of all outstanding debts, not on the value of everything we own! But this is what happens with ownership collapses and the STATE takes over most properties. Note how, in the Great Depression, the Fed insured banks, they didn't form LLP relations with them. On the other hand, they did guarantee savers would be saved if banks collapsed. But if the GOVERNMENT collapses due to too much debt, then no one can be saved, I may suggest. The Fed is not flush. It is deep in the red and falling deeper by the hour. I savaged Mr. Forbes the other day when he stupidly suggested we spend MORE on military adventures we can't afford as well as bailing out all the rich people who made stupid deals. Since both stupidity and stupid deals can reach infinity, this is a stupid proposition. This is why arresting or shoving out all who do stupid infinite deals is step in one in rescuing any economic system. Swap Users Sing `Your Cheatin' Heart' to Wall Street: Joe Mysak I instead refer to two class-action complaints filed on March 12 by seven municipalities, including Fairfax County, Virginia, the city of Chicago and the state of Mississippi, one against Bank of America Corp. and another against 35 securities firms for bid-rigging in municipal derivatives. The collapse of the muni markets was a conspiracy. As I suspected from the first hour. The pirates needed money. They needed someone to give them huge interest rates in return for them creating money out of thin air on a 30:1 ratio base. So the pulled this heist! Right in front of the government's eyes! And they hoped their bribes would prevent anyone in Congress or the White House from raising a stink. Only this failed. Someone had to pay the piper. We can thank a host of infuriated governors for this. Since they were all endangered by this, they banded together to hammer the SEC and others to investigate. So I am not very happy that the criminals are getting off lightly just so honest taxpayers can get their money back! Arrest these executives! At least, arrest the others who conspired. And who were they????? HAHAHA. J.P. Morgan and others are sweating with fear! They are rushing about, pulling every trick in the book, calling in all favors. They are all scared that more shoes will hit the floor. I would suggest, there are as many shoes left to fall as there were in Imelda Marco's shoe storage chamber! Commodities: Latest Boom, Plentiful Risk "Right now is a very scary time" for commodity market regulators, said Michael Riess, a director of the International Precious Metals Institute, a consultant to commodities investors for more than 30 years. "It's not a question of overregulating or underregulating. It's a question of just being swamped by volume, volatility and a dramatic shift toward speculative interests." And what are these commodity markets? I would say, an expression of global inflation! The flood of free money that suddenly spurted into action in the last 10 years has to flow somewhere! And so the entire planet sees billions of innocent people struggle and weep over rising costs of food, energy and raw materials. This is the real inflation that is destroying the purchasing power of billions of humans. Many now struggle between finding food or being able to cook food! Let's look at the NYT charts which I heavily amended:
This lunacy was helped along by two dishonest central banks: the US Federal Reserve LLP and the Bank of Japan which is an arm of the export industry there. Both used super-low rates as global carry trade sources for all the major financial houses which grew and grew and grew ever bigger. And which were allowed to raise their stakes in this global gambling operation to amazing degrees! Putting down pennies on dollars! Now, the whole thing is crashing. And the central bankers are conspiring together to do one thing: KILL INFLATION via KILLING THE COMMODITY MARKETS. This wonderful, new stage is setting the stage for a depression, of course. Because often, the countries making the most loot off of this are the ones that do not have central banking powers that can use the IMF and World Bank and the UN Security Council as tools to enhance powers. They also don't have nuclear bombs. Except for that huge resource pool called Russia. World dynamics now come back into play: Russia likes rising commodity prices. Russia wants rising commodity prices. Europe, Japan and the US don't. Except the foolish US is no longer a value-added nation, we are a COMMODITY EXPORT nation! So we should want higher commodity prices! Only we import huge amounts of oil so we need low oil prices but high farm prices! We are insane, of course. Once again, the Horns of Dilemma rear their ugly points. Asahi, a Japanese newspaper's editorial: U.S. financial crisis Concerns about worldwide inflation are also rising. It is not necessarily ideal for many countries to ape each other by slashing interest rates. The central banks in each country have to make their own difficult decisions. It always pays to visit Japanese news! HAHAHA. They want to be the ONLY people who lend below the rate of inflation! They are scared if everyone does this. They want us to have a strong currency and higher rates. But they want us to buy from them. So they will kindly lend us money at a lower rate via the Japanese Carry Trade. But this means, the yen has to be weaker! Like, at 130 to the dollar, not the frightful 96 to the dollar it hit just before the Fed decided to turn itself into a LLP. And so we continue to try to divine the markets. It looks increasingly like the ruling elites in the G7 need to reduce the commodities speculators. But they won't do this via higher interest rates and higher taxes while shutting down the pirate coves. Instead, the solution seems to be to have the central banks themselves, become conduits for these pirates! Isn't that just pretty? Yo-ho-ho....THAR SHE BLOWS! Mates, I just spotted the Derivatives Beast rising from the dark depths of the seas. Where is Ahab? His white whale is here! |
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Slowly, the secret negotiations between the pirates wrecking America's finances and the outlaws running the Federal Reserve are leaking out. Bernanke and Paulson turned the Fed into a LLP! Isn't that cute? Lousy Lopsided Pirates! The deal is, BlackRock, a pirate organization based offshore, of course, will bankroll this deal that is 30:1 billion with the Fed and JP Morgan! Morgan puts one billion into this kitty and the US taxpayers get stuck with 29 billion in losses if these CDOs decline in value! Whoopee. If I wanted to be cheated by con men playing three card monty, I would take Bernanke along. What a tough negotiator! Also, is this legal??? I doubt it.