SOROS: THE REAL RISK IS ENORMOUS
From the Humanitarian Resource Institute: "CNBC conducted an interview in Davos, Switzerland, with George Soros, Soros Fund Management; Larry Summers, former Treasury Secretary & CNBC's Maria Bartiromo:
A key focus point of George Soros was the systemic risk associated with nondisclosed $45 trillion in credit default swaps, and call for intervention by authorities to facilitate an investigation/full disclosure of asset valuations marked to market. Emphasis has been placed on the fact that confidence cannot be reestablished until full disclosure by all investment banks that have participated in these practices.
(boyz and grrrls, can you notice they've all been too busy bailing out their own sweet little asses, conning people into trusting them for just the weeeeeeeeeeeeeee bit longer? They've been too busy stuffing away money to keep up their Quarterly earnings than to keep track of their auditing of profound and BANKRUPTING debt?)
$45 Trillion encompasses a very conservative projection of the size and scope of a bailout needed to stabilize global markets from damage caused by synthetic new instruments, the failure of the ratings agencies and lack of regulatory oversight by reserve banks.
The latest report by the International Swaps and Derivatives Association (ISDA) shows that the total outstanding volume of all over-the-counter credit derivatives increased from $US 3.5 TRILLION in 1990 to $US 63 TRILLION in 2000 and to over $US 283 TRILLION this year. The total amount of exchange-traded and over-the-counter structured financial instruments was 27.3 percent of global GDP in 1990. This year it is 772.8 percent. The BIS has reported that the global market for derivatives has soared to a record $US 370 TRILLION in the first half of 2006, boosted by credit default swaps. - CurrentConcerns.ch: November Issue, 2006.
I believe the current global market for derivatives is now estimated to be over $US 700 Trillion. This would be over 70 times the outstanding U.S. Public Debt ($US 9.2 Trillion) as of 24 Jan 2008 at 04:40:18 AM GMT.
IS THIS WHY THE FED ACTED SO FAST?—FROM THE SYDNEY MORNING POST
The Federal Reserve Bank delivered a large rate cut with unprecented speed. Why?
In part, the size and urgency of the cut are explained by the intensity of the fear that had gripped the markets. In the abrupt bipolar switch between greed and fear, the markets, until Tuesday, had switched to full-time fear.
For example, the yield on US Treasury bonds at the moment is lower than the rate of inflation.
The meaning of this? To hold a government bond at the moment is to be guaranteed of losing money, in real terms. Yet frightened investors are rushing into bonds. Why? Because they are in single-minded pursuit of safety.
A number of famous market names have framed the downturn in apocalyptic terms….
Jim Grant, the publisher of Grant's Interest Rate Observer and a well-known Wall Street contrarian, told the Herald that an American recession in the current circumstances could bring "an end to the Bretton Woods system, Mark II", the existing world financial order created with the end of the gold standard in 1972.
The biggest of the world's bond market investors, Bill Gross, the founder of Pimco, told the journal Barron's last week that "economic growth will be below zero or mildly above it for a long time, and nothing like what we've grown used to in the past 10 to 15 years".
So the Fed is acting to interrupt the cycle of fear and panic to prevent it from becoming a self-fulfilling prophecy.
CHINA AT RISK TOO?
BEIJING (AFP) — China's reported establishment of a task force to monitor banks' subprime exposure shows it can no longer be assured financial markets are insulated from outside shocks, analysts said Wednesday.
The team, set up by the China Banking Regulatory Commission, the top industry watchdog, will examine the subprime holdings of China's major lenders on a monthly basis, the Financial Times said, quoting an unnamed official
.
"Chinese banks have more solid operations at home. Abroad, their risk management is not advanced enough," said Zhang Pan, an analyst with TX Consulting, a securities investment consultancy.
Fiduciary Investor reports; " The Federal Reserve Bank of New York recently hosted a Liquidity Conference to go through this process. Reflective fiduciaries can take advantage of some esteemed thinking in this area. Here's one report that was cited:
Understanding the Subprime Mortgage Crisis
"We find that during the explosive growth of the subprime market in 2001-2006 the quality of loans monotonically deteriorated and underwriting criteria loosened. In this respect, the rise and fall of the subprime market resembles a classic ending boom-bust scenario, in which unsustainable growth leads to the collapse of the market. We show that the problems in the subprime market were imminent long before the crisis in 2007, securitizers were to some extent aware of it but a high house price appreciation in 2003{2005 masked the true riskiness of subprime mortgages."
AMERICAN HOME RESOURCE NEWS: Housing and Stock Market fraud
San Diego, California -Politics, legislative and judicial fraud, the privatization of housing ( homeowner associations operated by foreclosure profiteers), the delivery of public services (including justice and law enforcement), the collapse of the world financial systems - all these are related to the rights and property of homeowners in, not only America, but the world. Nothing is an island, everything is of one warp and woof.
Decades ago, AHRC News Services, U S News and World Report, Congressionel Quarterly, and other publications, warned of America's Homeowner Association litigation floods. AHRC News Services reported that governors (Governor George W. Bush, Governor Gray Davis..) and other public officials, judges and foreclosure lawyers were colluding together by electing and appointing forecloseure interests to positions of power in government and courts, writing illegal laws and contracts and using courts and enforcement agencies to rob the homes, property and earnings of homeowners. ??In addition to forcing American home buyers to suffer in a housing fraud, they securitized the fraud-based American mortgages to unsuspecting international investors around the world. They also violated the fundamental rights of citizens in the process.
THE RACIAL DIMENSION: GLENN FORD
The report, titled "Foreclosed: State of the Dream 2008," shows definitively that banks and other lending institutions trapped Blacks and Latinos in predatory lending schemes as a matter of policy. "Even a surface check of the demographics shows," the report says, "that, in city after city, a solid majority of subprime loan recipients were people of color." The very scope of the crime proves that the lending crisis is not the product of Black "culture," but the result of calculated policies, near-uniformly carried out by virtually all of the nation's mortgage lending institutions. This is institutional racism writ large, and indisputable.
The money-lenders have already sucked the value out of whole communities, urban and suburban. The wealth loss is staggering: People of color have collectively lost between "$164 billion to $213 billion over the past eight years," with Latinos losing slightly more than African Americans. For the average American, wealth is passed on through the value of homes. That dream, as the report concludes, has been largely foreclosed.
BANKER IN FRANCE CHARGED WITH 7.1 BILLION FRAUD
INVESTMENT NEWS: Morgan Stanley to ax 1,000 jobs
ENTER THE LAWYERS: THE NEXT PHASE
The Columbus Dispatch (OHIO): Mortgage Lender Hid Big Risks, Suit Alleges
The giant mortgage financer known as Freddie Mac swindled an Ohio pension system out of as much as $27 million by concealing its heavy investments in the battered subprime lending industry, Attorney General Marc Dann alleges in a lawsuit. Dann said the Federal Home Loan Mortgage Corp. "secretly and intentionally participated in one of the largest housing investment deceptions in modern U.S. economic times." The lawsuit, filed Friday in federal court in Youngstown, alleges that Freddie Mac downplayed its investments in subprime lenders before its stock nosedived in November on news that it lost $2 billion in the third quarter, largely because of the collapse in the subprime market.
IHT: Subprime Losses: Now Everyone Has a Lawsuit Some Cases Reaching Across Continents
Everyone wants to know who is to blame for the losses paining Wall Street and homeowners.Mortgage lenders are suing Wall Street banks. The legal battles stretch from Main Street to Wall Street and beyond.
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