GOLDMAN SACHS REPORT: GLOBAL CREDIT COLLAPSE LOSSES $1.2 TRILLION
March 26th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
It’s like I’ve been saying, along with thousands of other analysts: We haven’t seen anything yet.
Now, daddy needs XLF to lean over and die so his Hail Mary April puts on that pig increase in value..
Via: BBC:
The credit crunch will globally cost $1.2 trillion (£600bn) according to a report from the bank Goldman Sachs.
The report says 40%, or $460bn, of those losses will hit US banks, brokerages and other institutions.
Goldman estimates that US financial firms have already reported losses of $120bn since the credit crunch began.
Banks made huge losses on investments backed by US mortgages. That is now hampering their ability to loan money, which threatens US economic growth.
“US leveraged institutions have written off less than half of the losses associated with the bursting of the credit bubble,” the report said.
ABC News Soundbite Version of NSA Intercept Story
March 26th, 2008For those of you who aren’t willing to wade through a post like, NSA, AT&T and the NarusInsight Intercept Suite, and the related documents, here is a condensed version:
Sterilise Parents on Benefits, Says Tory
March 25th, 2008Via: Telegraph:
A councillor is facing calls to resign after he said parents on benefits should be sterilised to stop them having more than one child.
John Ward, a Conservative member of Medway Council in Kent, made the comments during a discussion about the hunt for the schoolgirl Shannon Matthews.
He said her family was an example of social decline in Britain. He outlined his proposals to cut spending on social security payments.
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Writing on his personal website, the councillor said: “There is an increasingly strong case for compulsory sterilisation of all those who have had a second child – or third, or whatever – while living off state benefits.
“It would clearly take a lot of social pressures off all concerned, thus protecting the youngsters themselves to some degree, and remove the incentive to breed for greed, ie for more public subsidy.”
U.S. Home Prices Drop 11.4% in January
March 25th, 2008Via: AP:
A widely-watched index of U.S. home prices fell 11.4 percent in January, its steepest drop since data for the indicator was first collected in 1987.
The decline reported Tuesday in the Standard & Poor’s/Case-Shiller index means prices have been growing more slowly or dropping for 19 consecutive months.
The index tracks the prices of single-family homes in 10 major metropolitan areas in the U.S.
The broader 20-city composite index also fell, dropping 10.7 percent in January from a year ago. That makes it the first time both indexes dropped by double-digit percentages.
“Home prices continue to fall, decelerate and reach record lows across the nation,” said David Blitzer, index committee chairman at S&P. “No markets seem to be completely immune from the housing crisis.”
Blitzer said all 20 cities S&P tracks have seen dropping prices for five consecutive months. What’s more, the declines are growing in severity, with 13 of the 20 cities reporting their biggest single monthly decline in January.
The worst performing markets are Las Vegas and Miami, which tied for worst off as they both reported 19.3 percent drops.
Charlotte, N.C., squeaked by as the only gainer, with a 1.8 percent rise in January.
Canada: Patriot Act Haunts Google Service
March 25th, 2008The price is right on the Google honeypot.
Via: Globe and Mail:
Google Inc. is a year into its ground-shifting strategy to change the way people communicate and work.
But the initiative to reinvent the way that people use software is running headlong into another new phenomenon of the information technology age: the unprecedented powers of security officials in the United States to conduct surveillance on communications.
Eighteen months ago, Lakehead University in Thunder Bay, Ont., had an outdated computer system that was crashing daily and in desperate need of an overhaul. A new installation would have cost more than $1-million and taken months to implement. Google’s service, however, took just 30 days to set up, didn’t cost the university a penny and gave nearly 8,000 students and faculty leading-edge software, said Michael Pawlowski, Lakehead’s vice-president of administration and finance.
U.S.-based Google spotlighted the university as one of the first to adopt its software model of the future, and today Mr. Pawlowski boasts the move was the right thing for Lakehead, saving it hundreds of thousands of dollars in annual operating costs. But he notes one trade-off: The faculty was told not to transmit any private data over the system, including student marks.
The U.S. Patriot Act, passed in the weeks after the September, 2001, terrorist attacks in the United States, gives authorities the means to secretly view personal data held by U.S. organizations. It is at odds with Canada’s privacy laws, which require organizations to protect private information and inform individuals when their data has been shared.
At Lakehead, the deal with Google sparked a backlash. “The [university] did this on the cheap. By getting this free from Google, they gave away our rights,” said Tom Puk, past president of Lakehead’s faculty association, which filed a grievance against Lakehead administration that’s still in arbitration.
Professors say the Google deal broke terms of their collective agreement that guarantees members the right to private communications. Mr. Puk says teachers want an in-house system that doesn’t let third parties see their e-mails.
Some other organizations are banning Google’s innovative tools outright to avoid the prospect of U.S. spooks combing through their data. Security experts say many firms are only just starting to realize the risks they assume by embracing Web-based collaborative tools hosted by a U.S. company, a problem even more acute in Canada where federal privacy rules are at odds with U.S. security measures.
“You have to decide which law you are going to break,” said Darren Meister, associate professor of information systems at the Richard Ivey School of Business, who specializes in how technology enhances organizational effectiveness. “If I were a business manager, I would want to be very careful about what kind of data I made accessible to U.S. law enforcement.”
Using their new powers under the Patriot Act, U.S. intelligence officials can scan documents, pick out certain words and create profiles of the authors – a frightening challenge to academic freedom, Mr. Puk said.
For instance, a Lakehead researcher with a Middle Eastern name, researching anthrax or nuclear energy, might find himself denied entry to the United States without ever knowing why. “You would have no idea what they are up to with your information until, perhaps, it is too late,” Mr. Puk said. “We don’t want to be subject to laws of the Patriot Act.”
D.C.: Police to Ask Residents for Permission to Search Homes for Guns
March 25th, 2008Oh sure.
Via: NBC News:
A crackdown on guns is meeting some resistance in the District.
Police are asking residents to submit to voluntary searches in exchange for amnesty under the District’s gun ban. They passed out fliers requesting cooperation on Monday.
The program will begin in a couple of weeks in the Washington Highlands neighborhood of southeast Washington and will later expand to other neighborhoods. Officers will go door to door asking residents for permission to search their homes.
Police Chief Cathy L. Lanier said the “safe homes initiative” is aimed at residents who want to cooperate with police. She gave the example of parents or grandparents who know or suspect their children have guns in the home.
Community leaders went door to door in Ward 8 Monday to advise residents not to invite police into their homes to search for weapons.
“Bad idea,” said D.C. School Board member William Lockridge. “I think the people should not open your doors under any circumstances, don’t even crack your door, unless someone has a warrant for your arrest.”
Ron Hampton, of the Black Police Officers Association, said he doesn’t expect many in the community to comply.
“This is one of those communities where the police even have problems getting information about crimes that are going on in the community, so to suggest, now, that the police have enough community capital in their hand that the community is going to cooperate with them, I’m not so sure that’s a good idea,” Hampton said.
Government to Examine Swings in Crop Futures
March 25th, 2008It is absolute madness that commodities are bought and sold using leveraged vehicles in markets that allow participation by speculators; individuals and organizations who have no interest or connection to the underlying physical commodity.
…
Participants who are trying to use the futures market in a legitimate manner, to secure supplies of goods, or to sell goods, at agreed upon prices in the future, are getting wiped out because the price action has little to do with the underlying supply and demand of the commodities!
—CBOT Resembles Carnival Act as Billion Dollar Black Box Operators Move In
Via: Business Week / AP:
Costlier corn flakes, pricier pizzas and painful pump fill-ups share more than top billing among consumers’ worries.
They’re all riding a roller coaster of commodity market prices, where peaks are unusually high. Like oil futures, agricultural futures have experienced dramatic highs and lows in recent months as Wall Street investors flock to commodities for protection from the falling dollar and slumping stocks.
But the ups and downs in futures prices are giving grain sellers and farmers financial vertigo. Instead of finding predictable prices for wheat, corn and other crops in futures markets, they’re getting daily price jolts and no refuge from uncertainty.
That has prompted government regulators to examine what forces, if any, have thrown the markets off balance.
The Commodity Futures Trading Commission said last week it will meet with farmers, traders and grain sellers next month to assess the recent price jumps.
The loss of equilibrium has rattled large grain merchants that buy wheat and other crops and sell them to food processors like Kellogg Co. and General Mills Inc.
“There has been a huge influx of capital from index funds and pension funds to the point now where futures markets are not reflecting actual supply and demand,” said Todd Kemp, spokesman for the National Grain and Feed Association.
As a result, Kemp said grain buyers have had to pay more to hedge themselves against future price shifts. Some of those expenses have been passed on to food processors and then to consumers. The futures volatility is adding to a cocktail of cost-raising factors that have pushed bread, cereal and other staples to record highs.
Back in DBA
March 24th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
Catching a falling knife. This is a risky one. Stop $36.
Fed May Buy Mortgages Next, Treasury Investors Bet
March 24th, 2008The Fed will buy trillions of dollars worth of mortgages? WTF?! Will the Fed buy the Pay-Day-Loans from all the baby daddies in the ghettos as well?
What will happen to the dollar after this nonsense?
Via: Bloomberg:
Forget lower interest rates. For the Federal Reserve to keep the financial markets from imploding it needs to buy troubled mortgage bonds from banks and securities firms, say the world’s biggest Treasury investors.
Even after cutting rates by 3 percentage points since September, expanding the range of securities it accepts as collateral for loans and giving dealers access to its discount window, the Fed has been unable to promote confidence. The difference between what the government and banks pay for three- month loans doubled in the past month to 1.95 percentage points.
The only tool left may be for the Fed to help facilitate a Resolution Trust Corp.-type agency that would buy bonds backed by home loans, said Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co. While purchasing some of the $6 trillion mortgage securities outstanding would take problem debt off the balance sheets of banks and alleviate the cause of the credit crunch, it would put taxpayers at risk.
“Pay Day” Loans Exacerbate Housing Crisis
March 24th, 2008Winding down…
Via: Reuters:
As hundreds of thousands of American home owners fall behind on their mortgage payments, more people are turning to short-term loans with sky-high interest rates just to get by.
While hard figures are hard to come by, evidence from nonprofit credit and mortgage counselors suggests that the number of people using these so-called “pay day loans” is growing as the U.S. housing crisis deepens, a negative sign for economic recovery.
“We’re hearing from around the country that many folks are buried deep in pay day loan debts as well as struggling with their mortgage payments,” said Uriah King, a policy associate at the Center for Responsible Lending (CRL).
A pay day loan is typically for a few hundred dollars, with a term of two weeks, and an interest rate as high as 800 percent. The average borrower ends up paying back $793 for a $325 loan, according to the Center.
The Center also estimates pay day lenders issued more than $28 billion in loans in 2005, the latest available figures.
In the Union Miles district of Cleveland, which has been hit hard by the housing crisis, all the conventional banks have been replaced by pay day lenders with brightly painted signs offering instant cash for a week or two to poor families.
“When distressed home owners come to us it usually takes a while before we find out if they have pay day loans because they don’t mention it at first,” said Lindsey Sacher, community relations coordinator at nonprofit East Side Organizing Project on a recent tour of the district. “But by the time they come to us for help, they have nothing left.”
The loans on offer have an Annual Percentage Rate (APR) of up to 391 percent — excluding fees and penalties. All you need for a loan like this is proof of regular income, even government benefits will do.


