"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Sunday, March 23, 2008

Deep shit

So what happens on Tuesday ? Holidays and a vacation from reality is over boys.

The baboons who yank mindlessly at the financial levers face a grim choice.

The big bad boyz on the block, the banks, brokers and bullshit merchants from Bishopsgate to Canary Wharf - the crafty fuckers created and traded fraudulent "securities". The dozy, hedonistic, gullible, credulous losers , who borrowed too much money trying to get rich quick, or trying to live like the millionaires they admire so much on the idiot box in the corner of their heavily hocked hutch.

They can take the high road of moral hazards - let them sink (because sure as hell they are never going to swim against this tide of fiscal imprudence) suffer the consequences of their bad choices. Maybe they could (if they can find a dock big enough) prosecute some of the culpable bankers and corporate executives - starting with that bunch of criminals at Northern Wreck.


Accept the never ending capacity for cowardice , let these losers off the hook, wreck the whole machinery of capital by debasing the medum of exchange.

The Treasury, the FSA, The Bank and their claques in the Press can't face the losses, so for now they've apparently decided to wreck the currency.

3 months ago 67 pence would buy a Euro, today you need 79pence - a devaluation against our major trading partners of 19%.

But these blinkered bankers and their cheerleaders in the press have had a temporary reprieve in the financial markets. This reckless gang of bankers have been able to lick their wounds and lick Lord Kings backside as he promises even more Niagara's of funds to stave off the meltdown.

Much has been made of the "false" rumour that HBOS were in trouble - my god, every scribbler on Threadneeedle Street was blogging, writing columns that these nasty shysters were trying to bring the market down - did anyone ask the dreadful question - was HBOS bust ?

Hell NO. The shock and the recognition that many big institutions, household names, are worse than flat broke and are therefore powerless to conduct normal operations is something that the boneheads in the City cannot, will not, dare face.

Flat broke, means that all those RMBS (Residential Mortgage Backed Securities) are slowly deflating ... that deflation has a quickening pace. The non-payment stage is moving inexorably to defaults and onwards to repossessions on a grand scale.

Even if Lord King with his helicopters drops more money every week £5Bn.. £6 BN... bailing out feckless mortgage holders, the "lie to buy" ...ers, everything will hit the buffers when we have to disassemble who owns what . Diced and scliced, mixed and re-mixed, in a toxic token of debt, shuffled around like a parcel at a party these "securities" off-loaded onto countless dupe "investors" ranging from municipal funds in obscure corners of foreign nations to countless public employee retirement plans.

All secured by the legal systems of Trusts held in those centres of financial probity in the Dutch Antilles, Cayman islands, Virgin Islands, and a little nearer home, the festering pits of money jugglers in Jersey, Gurnsey and the Isle of Man.

What do we do on Tuesday ?

As the margin call is made on the market, as the sucking chest wound absorbs the helicopter funds like the surgical swabs soak up the blood, the flat line buzzer will buzz as the folks in intensive care stare desperately at the flickering screen.

Businesses will shutter, payrolls, empty, families evicted.

There will be a lot of pissed off little people out there who put their faith in banks, big business and and prayed as they filled in their Lotto cards weekly.

This is what it looked like in Boca Raton last week when they couldn't be assured of housing funds ...

I tell you, the speed of this is going to astonish everybody.

UPDATE D Telegraph 24.3.08 Fed's rescue halted a derivatives Chernobyl by Ambrose Evans Pritchard


Digger said...

They managed to stave off the HBOS ('which looks after the savings of more Britons than any other bank') panic on Thursday by suspending the HBOS shares & blaming a gaggle of city boys spreading rumours. (Let's see if the FSA ever lays any charges....)

If the BoE does cave in & offer to accept the banks' mortgages (including the associated dodgy Alt-A & Off-Balance Sheet Securitizations), then sterling will be de-valued & inflation will ensue. If the BoE does not give the banks any liquidity rope, then look out for the bank runs......

Yep, Tuesday will be very interesting.....

Anonymous said...

Let's see if the FSA ever lays any charges....

5 months later...
Financial Times

FSA finds no sign of HBOS manipulation

By By Jane Croft, Retail Banking Correspondent

Published: August 1 2008 16:13

The Financial Services Authority on Friday admitted that it had not uncovered any evidence of a concerted attempt to drive down the share price of the UK’s biggest mortgage lender after completing a five-month investigation.

The City watchdog opened the investigation after shares in the UK bank plunged 17 per cent in mid-March as false rumours spread that HBOS had sought emergency funding from the Bank of England.

The rumours came just a week after the emergency sale of US bank Bear Stearns and triggered a heavy sell-off in sector shares. The Bank of England was forced into the highly unusual action of ringing around news organisations to deny that it had held emergency meetings to discuss the viability of specific banks, including HBOS.

The FSA said that it had no evidence that the rumours were spread by unscrupulous traders who had used the scaremongering to make profits. “Despite the likelihood the rumours contributed to the fall in the share price, the FSA has not uncovered evidence they were spread as part of a concerted attempt by individuals to profit by manipulating the share price,” it said.

The FSA interviewed a number of market participants at investment banks, broker dealers and hedge funds – including traders, senior management and compliance staff.

It reconstructed segments of the order book, scrutinised trading records relating to HBOS shares and derivative instruments as well as reviewing e-mails and messages highlighted by market commentators.

The regulator conceded there was no doubt “false and damaging rumours were circulating about HBOS” on 19 March 2008 and these would have had some impact on HBOS’ share price. It said it was “difficult however to say how much impact, as the share price was also affected by the interaction of a number of other complex factors on the day”.

(C) Very Seriously Disorganised Criminals 2002/3/4/5/6/7/8/9 - copy anything you wish