THE RED SPECKALED SCREEN

yo!...elementary...innit..!

PALOOKAVILLE FINANCIAL stardate capitulation day+22

...sherlock holmes is puffin on is pipe an watson oilin a old shot gun...inna drawrin room...

watson : WTF..?...birdbrain!

holmes : elementary my dear watson...there was no money...it was all an illusion...fueled by credit conjured outa nowhere by a leverage machine anna bunch a cunnin bastards...

watson : yo mean a bankers dude?

holmes : no jus a bankers man...politix anna developers anna media an alla suckers wot believed inna dream...

watson : i say!...wots ta be done?.. holmes old boy?

holmes : elementary my dear watson!...we gotta make a banks own up an
TELL THE TRUTH...

market ticker : "They(the credit markets) remain frozen because the root cause of the problem is that banks and other financial firms have been lying for more than a year, each quarter claiming to have "kitchen sinked" their losses only to report more the next quarter, and in some cases have gone on national TV to proclaim they're "well-capitalized" only days or weeks before they collapse!

The first question anyone asks when someone wishes to borrow money is whether or not they will get paid back. If the lender does not believe they will be able to be paid back then that loan will not be made, no matter how much money someone has available to them.

It really is that simple folks and yet this fundamental principle has been willfully and intentionally ignored for more than a year.

THE UNDERGASM

beulah : yo! painty shugga...why is alla em screens red?

painty : honey...thats cos a whole wurl is shittin itsen ovva a complete seizure o a financial system...

beulah : yeh..but it not gon fect us nah is it?

sadsakkapaintysh*t : nah...yo goo back a sleep honey it all be ovva by a time yo wakes up...innit!

zooneh : yo! dude...i don think it be ovva fo a while man...

saddy : i knows it man...but i aint gotta heart fo ta tella a troof...

so...nah we see wot come o buckin a market...instead o takin a likkle hit o recession
nah anna gen...we create a permanent boom onna nevva nevva an massage a markets to a point o undergasm...a whole wash day...shot ta hell...

...a illusion lost...anna crisis convulsin a suckers...a f**kin whiplash o tension explodes...
an causes iss sunami o debt...ta puke up all ovva a table cloth...

TRUST = CONFIDENCE...LOSS OF TRUST = DISASTER...

barry : "...The thing roiling markets today is not the lack of confidence; It is capital, or more accurately, the lack thereof. Thanks to a series of very poor trades—excessively leveraged and absurdly risky to boot—banks are now dramatically undercapitalized.

As we have seen in just about every historical financial crisis, the shortage of capital is the underlying cause of monetary mayhem. Too much debt, too little equity, makes any financial system cease to function." the big picture

nouriel : ..."The crisis was caused by the largest leveraged asset bubble and credit bubble in the history of humanity where excessive leveraging and bubbles were not limited to housing in the US but also to housing in many other countries and excessive borrowing by financial institutions and some segments of the corporate sector and of the public sector in many and different economies: an housing bubble, a mortgage bubble, an equity bubble, a bond bubble, a credit bubble, a commodity bubble, a private equity bubble, a hedge funds bubble are all now bursting at once in the biggest real sector and financial sector deleveraging since the Great Depression...." over at mish's

DON LOOK DAHN

yo!...strange days!...innit...!

PALOOKAVILLE FINANCIAL stardate capitulation day+19

...while dorktrekkin inna long episode o
DORKTREK : LOST IN SPACE...the crew from the loft in
down town palookaville had fallen thru a back o a cornflakes box
inna breakfas nook an become trapped inna 'flation nebula...

...a de-leveraging black hole has been suckin alla life outa
the galaxy an 'vestments bin shrinkin...

...identified as a NIAGARA drainhole...the sucker goin dahn is a bank near you!

...alla kings horses an alla kings men...beamed in...a mothership o dosh ta plug a sucker up...

...trouble is...fat lady inna wings..innit!
...an noboddy don know wether she don sung yet or no...


...CUBES an SPHERES...bin seen inna vicinity...an y'all know wot at means...


RESISTANCE IS FUTILE...

pjc :Profit illusion

..."Profits for the surviving companies will be squeezed by the recession and the taxes and public spending cuts needed to pay for the bank bailouts. As profits fall the idea that stocks are cheap on a price-to-earnings multiple will be seen for the illusion that it represents, and stocks will fall further...

...But how low will stocks go and how long will they stay there. It could be a steeper fall than I thought at the end of September and the recovery take much longer. This is not a normal cyclical recession in which stocks will bounce back. It is a once in a generation global financial crisis and will take very much longer to put right...." PJ Cooper

nick : Back in June 2008 I wrote a piece for VOXEU predicting a mild recession in 2009. Over the last few weeks the situation has become far worse, and I believe even these pessimistic predictions were too optimistic. I now believe Europe and the US will sink into a severe recession next year, with GDP contracting by 3% in 2009 and unemployment rising by about 3 million in both Europe and the US. This would be the worst recession since 1974/75. In fact the current situations has so many parallels with the Great Depression of 1929-1932, when GDP fell by about 50% in the US and by about 25% in Europe, that even my updated predictions could again be over optimistic....

nick : ..."But after these earlier shocks volatility spiked and then quickly fell back. For example, after 9/11 implied volatility dropped back to baseline levels within 2 months. In comparison the current levels of implied volatility have been building since August 2007 and are likely to remain stubbornly high.

But even these more moderate surges in uncertainty after these earlier shocks had very destructive effects. The average impact of the sixteen shocks I examined in prior research was to cut GDP by up to 2% in the following six-months. The current shock is both larger than these on average and also appears to be more persistent. If these earlier temporary spikes in uncertainty led to a 2% drop in GDP the impact of the current persistent spike in uncertainty is likely to be far worse...." voxeu

peteypainty : how was it fo yo zoon?

zooneh : yo mean...how is it fo us?..boss..

chart from alphatrends hat tip - financial armageddon

ALL THE KINGS HORSES

AND ALLA KINGS MEN...

yo!...humpty dumpty...innit..!

PALOOKAVILLE FINANCIAL stardate capitulation day+19

...dorkfleet starships...TITANIC AND BRITANIC have been blown out of the water...
by panic selling...caused by the realisation that they was BUST

...the sinkin o a good ship...LEHMAN...was wot caused it ta go pear shape...big time...
suckers all saw emsel abaht ta be whacked by a FEDS anna govt...

bloomberg : ``The big concern is that we're going into recession,'' said de Graaf, a senior managing director at ISI Group Inc. in New York. ``The first part is the unwind of the previous boom, the second is the recession that follows. We're in the camp that we're only halfway through this.''

INCLUDE ME OUT

halfcat : doooommed.!...we're allll dooomed...

zooneh : why is any one surprised?

beulah : at painty bastard aint as stoopid as ah thinked...

spider : wassup?..innit...plenty o flies arahnd.!...wot wiyall iss sh*t an stuff...

laverne : ahm sittin onna fortune...innit..?

THE GRAPES O WRATH

jeff : “Cause and effect run from the economy to the stock market, never the reverse. In 1929, the economy was headed for trouble,” wrote Galbraith.

As now, too few understood this. Many who foresaw disaster kept quiet. There was a conspiracy of silence. “The foolish thus [had] the field to themselves.”

In the 1920s, says Galbraith, America’s economy had been weakened by “bad distribution of income... bad corporate structure... bad banking structure... dubious state of the foreign balance... and poor state of economic intelligence”. Who can say with certainty that today it is different? Who now wants to defend the promoters of a one-way bet on property? Any takers?

For those hoping that the stock market’s recent “correction” will be followed by a swift recovery, Galbraith puts a wealth warning on suckers’ rallies. “The singular feature of the great crash of 1929 was that the worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning. Nothing could have been more ingeniously designed to maximise the suffering.”

It’s worth remembering that a full recovery in the stock market took more than 20 years. During that time, in July 1932 the Dow Jones index was 89pc below its top. In Britain, the reaction was less severe: the market merely halved." Telegraph

market ticker : "...Market participants must be able to know that when they engage in a transaction it will be transparent, handled fairly, and their rights will be protected.

Our politicians must stop demanding the impossible - that home prices "levitate." House prices cannot be maintained at more than 3x incomes - it simply can't be done. We must encourage home prices to contract to sustainable, affordable levels quickly and efficiently.

Mortgages must return to 30 year fixed notes, 20% down, no more than 36% DTI. No government-linked paper in any GSE may issue outside these guidelines. We must reliquify the mortgage market, and this is the only way to do it - by writing only sustainable mortgages...."

petey : humpty dumpty sat onna wall...humpty dumpty had a great fall...

EMERGENCY COME DANCING

yo!...BAILOUT UK...innit..!

...latest from PALOOKAVILLE FINANCIAL stardate capitulation day+18

...HMS BRITANNIC out of Lombard St. has run aground only days after her sister ship USS TITANIC out of Wall St...had to be bailed out to the tune o loads a money...!

...itz take yo pardners please fo a DANCE MACABRE...o a VAMPIRES...innit..!

painty : to be continued...we hope!

THREE COLOURS RED

STOCKS AN COMMODITIES
TREASURIES AN DOLLAR

petey : itta ill wind...innit!

...disclaimer at side...innit!

MONDAY MORNIN COMIN DOWN

yo!...itta fan annit..!

PALOOKAVILLE FINANCIAL stardate capitulation day+17

...another quiet weekend here in palookaville...with the whole world unravellin arahn us...here we sit like burks inna wilderness...

fo get at more banks is sinkin...fo get at stok markets a plummetin...

EUROZONE BREAK-UP SNEAKIN ONTA A RADAR

liam : " Now, with Europe under systemic pressure, eurozone politicians are heavily exposed to the drawbacks of the single currency. I’ve argued before this credit crunch could, ultimately, test monetary union to destruction – and am sticking to that view." Telegraph

Every country for itself as European unity collapses in an attack of jitters

STATESIDE bin takin alla stick...til nah...innit

FOR WHOM THE BELL TOLLS

yo!...anvil inna air innit..!

y'all seen at TOM AN JERRY toon where the ANVIL is catapulted inta a air by a dog or summat
an tom run arahn tryin ta void a nevitable...inna end he jus dig a grave an wait fo a thang ta land on he head..!

PALOOKAVILLE FINANCIAL stardate capitulation day+14

...all quiet here in palookaville this mornin...alla folks is onna net...tryin ta move they savins ta sumplace safe!

beulah : yo lazy painty bastard!...how come yo settin ere doin nowt..wiyalla wurl runnin rahnd shahtin..DON PANIC..?...an movin a dosh out a bust bastards inta guaranteed sh*t..?

'cat : cool it buely babe! yo ol man...tryin ta woikit aht..fo why it all appnin an how ta stop a sucker goin dahn...

zooneh : cop fo dis...dude ovva at bloomberg sayin in his own opinion...

johnathon : ..."Why would a smart guy like Hank Paulson -- the former boss of Goldman Sachs -- advance such a dumb, shady plan? Let us count the reasons:

No. 1: It delays our national reckoning until after the presidential election.

Paulson first floated a bailout Sept. 18, at the very hour when shares of Goldman Sachs Group Inc. and Morgan Stanley looked like they might go into a death spiral. It's not so much a bailout, as it is a timeout. He had to follow up with something, anything, to stop the freefall from resuming. It didn't have to make sense.

So it doesn't. The plan is about creating the illusion of stronger financial institutions, not strengthening them.

The banks know this. Otherwise, they would have stopped charging each other near-record rates for three-month loans by now. The reason they haven't is because they're still afraid their customers -- other banks -- might go broke.

No. 2: The reckoning will be worse than you can imagine.

If Paulson were serious about recapitalizing rickety U.S. banks, he would infuse them with hundreds of billions of dollars of fresh government money, in exchange for ownership stakes. And if he wanted to create market liquidity for all those troubled assets on their books, he would be ordering banks to disclose everything there is to know about them, so Mr. Market could figure out their present value.

He can't let that happen. Not now. If everyone could see how much the toxic waste is worth, the writedowns would be so huge that many banks would have to be declared insolvent.

Better to let the next administration deal with the clean- up. The trouble is, the longer the government waits to address the banks' lack of capital, the worse it gets, barring a miracle.

No. 3: He's helping his friends.

Is there any doubt? Let's see.

As of yesterday, Morgan Stanley Chief Executive John Mack owned 2.75 million shares of his company's stock, valued at about $67 million. If Mack can get Morgan Stanley to trade reams of sketchy paper for billions of dollars of our Treasury's cash, without diluting any of his stake in the company, who benefits?

Paulson would have us believe it's you.

No. 4: There's an excellent chance the Congress will pass it. Leave someone else to figure out the costs another day." (my emphasis) bloomberg

petey : so!...it aint ma babe...no no noooo...it aint me babe...it aint me you're lookin forrr...babe!

INSIDE THE 'FLATION NEBULA

yo!...'flation gon be DE...innit..!

PALOOKAVILLE FINANCIAL stardate capitulation day+14

...the united flakes dorkship TURNERPRIZE is lost in space...having gone to the rescue of the dorkship TITANIC out of WALL ST... holed below the waterline by a runaway credit binge ...toxic sh*t spilling out inta space...solidifyin an blockin alla trade inna financial universe...

...both ships are now entangled in a DE-LEVERAGING BLACK HOLE which is suckin alla banks an financial institutions inta a negative zone...

...Admiral Paulie an cappin brush, o the titanic, are swirlin arahnd wiya loada houshold names an famous brands at as gon downa plughole inta negative space...

brushie : noboddy seen the sucker comin...

paulie : they aint no plan...

peteypickard : the tractor beam is broke anna titanic sucker gon go dahn...

zooneh : it be DEflation boss...prices a assets shrinkin atta evva faster rate...

spook : itz 'flation jim!..but not as we know it...

scotty : economy worse an at!...itz dead jim!

halfcat : wot fo i got be gilligan?..ah wants ta be Rick...

petey : shuddup 'cat yo gon be wot ah say innit!

beulah : wages gon be worth mo dosh...anna kin buy a place fo BEADS...

laverne : yo klutz!...wages gon havta fall innit... workin stiffs gon lose ay jobs man...

paulie : yo! we fix congress man...it all gone be fiiinnnee!

THE END OF MORAL HAZARD

aht ere in space no one kin hear a screams...currencies changin colour alla time... shocks an scares lakka yoyo...banks wotz bust...

edmund : "The world we are set to live in in the coming years will be deflationary. In fact, it already is - house prices are deflating at the fastest rate since the 1930s. As banks stop lending and the amount of cash in the system dries up, so too does demand - in other words a key propellant for economic growth - and soon enough we find ourselves facing a recession and potentially deflation.

If you are looking for proof, look no further than the mass of complex statistics produced by the Bank of England on money. I am no monetarist, but Milton Freidman was without doubt right that inflation is always and everywhere a monetary phenomenon. And the amount of money sloshing around in the system is starting to drop dramatically. These figures - an economic early warning system if ever there was one - are flashing red...." Telegraph


previously on 'FLATION NEBULA

A SHIP OF THE LINE

yo!...mutiny onna BAILOUT...innit!

PALOOKAVILLE SPORT stardate capitulation day+13

the story so far...

united flakes dorkship TITANIC, out of Wall St. has run aground on a creditburgh and is holed below the water line...toxic sh*t has spread across the financial world and has solidified...

captain brush has ordered the crew ta SAVE THE SUCKER...but the crew have mutinied...

...they have refused a direct order from the bailer in chief and now Admiral Paulson has convened a court marshal with threats of a good floggin wiya cat-o-nine tails..

keel haulin has been ruled out...for now...

captinbrush : this sucker could go dahn...

paulie : America expects every man ta do is dooty...

market ticker :

jeff : "Predictably, the refuseniks have been pilloried as ill-informed nihilists. They have been lambasted for failing to understand the consequences of their actions. They are, according to the Big Bail-out Brigade, condemning the rest of us to be buried alive in the rubble of a disintegrating banking system.

Try a different take. Yes, the West’s financial infrastructure is in severe distress. Yes, more banks are going to crumble. Yes, there will be a recession. But allocating $700bn (it would almost certainly turn out to be more) to a clean-up programme for toxic assets, in effect socialising the poison of private greed, has no merit other than to delay the inevitable. No amount of federal cash can rewind the X-rated horror video.

There is a conspiracy of bankers and politicians whose self-interest is masquerading as sophisticated policy. They want us to believe that they have the keys to salvation. I have not seen a scrap of evidence to confirm this." Telegraph

mish : "The bill is very clear. Assets now held in China and London can be sold to US entities on Monday and then sold to the Treasury on Tuesday.

Paulson has made it clear he will recommend a veto of any bill that contained a clear provision that said if Americans did not own the asset on September 20th that it can't be sold to the Treasury.

Hundreds of billions of dollars are going to bail out foreign investors. They know it, they demanded it and the bill has been carefully written to make sure that can happen.

Senator, please scrap the Paulson proposal in entirety and try something that might work, that is constitutional, and does not put taxpayer money at risk.

US citizens should not spending $700 Billion to bail out foreign investors. The actions of Treasury Secretary Paulson go far beyond disgusting, to outright betrayal of US citizens.

I ask that you take a clear stand against this un-American bill by not only voting against it, but to Filibuster the bill until it is given up for dead. I cannot and will not vote for any legislator who votes for this bill, or even allows it to be brought up for vote." mish

previously on a ship of the line...

RED EUROS ?

yo!...pot callin a kekkle black innit!

seems lak mebbe all not perfik in
euroland as well...

mebbe itz time fo a euro ta...
relax an..chill out...





PALOOKAVILLE FINANCIAL stardate capitulation day+12

ambrose : ..."Carsten Brzenski, chief economist at ING in Brussels, said the global crisis was now engulfing Europe with devastating speed.

"We are at imminent risk of a credit crunch. Key markets are not functioning properly. The Europeans thought the sub-prime crisis was just American rubbish that the US should clean up itself, but now they are finding out that it is their rubbish too," he said.

Data from the IMF shows that European banks hold 75pc as much exposure to toxic US housing debt as US banks themselves. Moreover they have mounting bad debts from the British, Spanish, French, Dutch, Scandinavian, and East European housing markets, where property bubbles reached even more extreme levels that in the US.

The interest spread between Italian 10-year bonds and German Bunds have ballooned to 92 basis points, the highest since the launch of the euro. Bond traders warn that the spreads are starting to reflect a serious risk of EMU break-up and could spiral out of control in a self-feeding effect.

As the eurozone slides into recession, the ECB is coming under intense criticism for keeping monetary policy too tight. The decision to raise rates into the teeth of the crisis in July has been slammed as overkill by the political leaders in France, Spain, and Italy...."Telegraph

BAIL TO THE CHIEF

don put yer muck in ah dus bin..ah dusbin..ah dusbin....Don putcher muck in ah dusbin...ah dus bin full...

yo! fear onna street innit!

PALOOKAVILLE FINANCIAL stardate capitulation day+12

peterthepainter : welllll...!...WTF..? why everone so surprise? the politix have ditched a boss...

...after the WMD anna WAR ON TERROR anna Wall st BONUS scandal...

...e gon be gone soon anyhow...an a boy gotta look affer hisell...

spider : yo! boss...it lak a french revolution innit...aristocrats wot got too rich an high falutin fo ta sociate wiya po folks...nah it be ya BONUS RICH wot drawin a fire o a people...

laverne : workin stiffs aint hadda fair shake innit...wages not risin so ay raided a equity inna shack...anna ristocrats caint get innuff on it...

beulah : en ay wraps it up inna poke an sells it as prime pork ta a suckers all ovva a wurl an a WATCHER looks on...an does nowt!

opkin : nah a workin stiffs wots payin ere mortgages is inna bate an is ringin the politix an tellin em...don yo dare man!...do not even think abaht it!

petey : the bollox is fulla it...specially a msn fo a tabloid dude...they windin alla dudes up abaht howa markit gon tank...an a wurl gon end...but it only business returnin ta normal...assets bein sold fo wot folk will pay!

zooneh : ya caint buck a market man!

chief : one word from me an ay do wot ay likes...

more later...

THREE DOLLARS : BLUE

BLUE DOLLARS
RED DOLLARS
WHITE DOLLARS

PALOOKAVILLE FINANCIAL stardate capitulation day+11

yo! blue dollar day so far...innit!...euro anna pahnd...dahn a toilet as "crisis spreads ta europe"...

cablepetey : three colours dolla be a new way o visualisin a wurl's reserve currency...

blue dollas good, red dollas bad, white dollas...watch aht below...!

it all inna handsa a politix...wot yo vote is wot yo get..!

THE DOLLA YA GET BE A DOLLA YA DESERVE...INNIT.!

AS FALLS NIAGARA...

Dow to fall to 7,000, FTSE to 3,300

peterjcooper : Consequences, consequences

..."What we have yet to see are the repercussions in terms of job losses, bankruptcies and consumer spending. It is a vicious downward spiral and when people talk about a recovery in the second half of 2009 you have to ask: why? Surely this fall-out will produce another round of bad debts, write offs at the banks and restricted credit.

So while the $700 billion bailout fills a hole, it does not get us back to business as normal. It is hard to know what would do that, except a long recession and a big shake-out of every business and bank that has not got a rock solid business model.

In this case profits are going to tumble across the board. That means the cheapness of price-to-earnings ratios in global stock markets are a mirage and highly deceptive to value investors. Try inputing a loss rather than a profit on a few stocks and see what kind of a p/e ratio you get!

As George Bush said of the US legislative process this week ‘this is not going to be pretty’. Many former lynch pins of the global economy, like the hedge funds are going to collapse. Nine out of ten hedge funds do not make enough to trigger their profit shares now, and subscribers are bailing out all over the world. .." peter j cooper

LATER THAT SAME WEEKEND..

yo! lost weekend draggin on up ere inna loff...

PALOOKAVILLE FINANCIAL stardate capitulation day+10

peteypainty : whew! ahm plum wore aht...allat proper talkin yezday...

spider : yo been ovva doin it man...alla iss upandahn inna markits gettin to ya!

peteystress : innit man! an sad too!...sucker don know which way a toyn...wot wi a fixin o a market...changin a rules...proppin up dis...bustin that...

spider : one rule fo us an annovva fo em innit!

bluepetey : it at Admiral dude...ya know...Sir Walter Paulson...one mo he bringin taters an baccy ta a party anna nex e goin dahn onna knee ta a politix...beggin em ta bankroll a party fo til affa a 'lection...

zooneh : yo speech yezday onna three colours dolla was a belta dude! yo sure gotta fix onna dolla innit!

cablepetey : ah feel bad abaht it man!...ah don lak a dis a dolla. merica bin gud ta uz
nah an agin...ah sumtimes expec too much an am givvun ta hyper-bole...

spidah : lesssee wot calmer heads is sayin...

irwin : A bailout won't wreck economy

...."So massive losses are not likely. Nor is it likely that inflation will be triggered by the bailouts already engineered by Ben Bernanke and his colleagues at the Federal Reserve System, which some estimate to have involved close to $300 billion. The net effect of the Fed’s moves has not been to increase the money supply at a dangerous rate. Experts estimate that the increase in the money supply — which, if substantial, would trigger inflation — has been lower during this “crisis” than in recent years.

Throw in another fact: the economic slowdown that is hitting America, euroland and other parts of the world will ease pressures on commodity prices, and keep labour costs from rising. That’s why economists at Goldman Sachs are confident that once the cyclical downturn is behind us, the dollar will appreciate in value.

They are guessing that in the next three to six months the dollar will hold its value against the euro at about $1.45- $1.50 to the euro. Then, assuming that financial markets return to some semblance of normality, they are looking at euros costing $1.40. In the longer term, rising productivity and lower domestic inflation, should enable Americans to stomp across the pleasure spots of Europe, paying only $1.25 for each euro. Not as wonderful as when the eurozone currency could be had for less than a single greenback, but a big improvement over recent times when the euro cost $1.60....." The Sunday Times

peteyfairplaya : yeh! ah feels betta nah!....it were at bit abahta WHITE DOLLA wot wobbled me man...ah wunner iffn it ovva a top?

thesilversurfer : yeah verily!.. they may be calmer an wiser heads petey boy but yo doin yo best ta mek sense o a bad bitta sh*t wot goin dahn...

...onnanuvva note...I am the herald o GALACTICUS an he be goin ta suck up alla dosh onna planet an turn it inta energy fo his sen! alla banks an financial institutions gon be destroyed by DECLARATION O GALACTICUS...!

beulah : where at crummy painter dude? ah swear he nevva arahn whenna sh*t hitta fan...

peteyhero : SEND FO A WATCHER....

to be continued...

THE LOST WEEKEND

RED DOLLARS

yo!...film noir innit!...The Lost Weekend...suckers all hooked on credit...

PALOOKAVILLE FINANCIAL : stardate capitulation day+9

peteypropertalk : the story so far... suckers are goin cold turkey this weekend as credit has been withrawn...

...alone in a condo in the land of the free is a sad economy that is hooked on credit and can't break the habit....but the banks is now BUST and Admiral Paulson is down on his knees begging the politix to fix the market with
THE MOTHER of all BAILOUTS....

sh*t sticks...

...the politix, though, are baulking at the idea!.. as the workin stiffs are onna phone...anna email...an inna streets...marchin. this is because they do not want RED DOLLARS...
that is...anti-money - DEBT...

...the politix are scared that if they vote for the BAILOUT, without BLUE DOLLARS for their voters, they will be smeared with the same sh*t as the banks...

...during this lost weekend, when the politix should have gone home to bed, the bollox are having a field day sayin as how a wurl is gon end if the markets arn't fixed...
fear is being created along with the ponzi-money to force the MOTHER PLAN through...

...the dollar is now available in three colours and nobody wants the red ones...everyone wants the blue ones, you know...the ones with EQUITY the ones with some VALUE...

...trouble is, the bankers have run off with the blue dollars inna BONUS an now the red ones are destroying the blue and soon the dollar will be BLED WHITE..!


WHITE DOLLARS

this is what happens when you get addicted ta DRUGS...the first hit is always free...!

WHO TF is gonna want to hold the WHITE DOLLAR..?...a shadow of itz former self..

peteythepreacher : power, influence, status...a whole washday shot to hell...


FT : Need for action on the banking panic

"Banks are not to be trusted. This is not just the view of the public and policymakers, but that of the banks themselves. Spreads on unsecured inter-bank lending have reached unprecedented levels, particularly in dollars and, to a lesser degree, sterling. Such stresses cannot continue for long, without serious damage to both the financial system and the economy. Something has to be done. The question is: what?"

peteythepension : sooner or later this has to stop! and asset prices have to return to fair market value...in my view the propping up of asset values is just an attempt to fix the markets until after the election and will only delay the inevitable...think Japan in the 90's...

think zombie economics...

THEY AINT NO PLAN..!

yo! 'kaletski march'...innit

PALOOKAVILLE SPORT stardate capitulation day+8


MAKE A NEW PLAN STAN...DROP OFFA QUAY LEE

Save the world? Hank just didn't have a clue

The staggering incompetence of the US Treasury Secretary is now acknowledged - and is a disaster for George Bush

anatole : "Until last week, I was in a minority of one in arguing that Mr Paulson was personally responsible for suddenly turning the painful but manageable credit crunch that had been grinding away 18 months in the background of the US economy into a global catastrophe. Mr Paulson's appearances on Capitol Hill, marked by the characteristic Bush-era combination of arrogance and incompetence, are turning my once-outlandish view into conventional wisdom: Henry Paulson is to finance what Donald Rumsfeld was to military strategy, Dick Cheney to geopolitics and Michael Chertoff to flood defence.

Mr Paulson may be a former chairman of Goldman Sachs, but as US Treasury Secretary he does not know what he is doing. His recent blunders, starting with the “rescue” of Fannie Mae, have triggered unintended consequences around the world, resulting in the death-spiral of financial values. But last Friday Mr Paulson outdid even these Rumsfeldian achievements, when he demanded $700 billion from Congress for a “comprehensive and fundamental” solution to the global financial crisis, without apparently having any idea of what he would actually do....

...When further details of the Paulson plan failed to appear on Sunday it was assumed that the details were being untangled in late-night political negotiations. When there was still no plan on Monday, the view was that Mr Paulson must be holding back the details for his testimony to the Senate Banking Committee the following day. But then, to everyone's astonishment, Mr Paulson turned up to the committee on Tuesday morning with only the briefest opening statement, which simply repeated what he had already said the week before: the sky was falling and the only way to stop it was to give him authority over $700 billion in public money, to be spent in unspecified ways.

And suddenly the sky did fall down - not on the world economy, but on Mr Paulson. Consider the reactions from American politicians, including Republicans: “Stunning and unprecedented in its lack of detail”... “a $700 billion blank cheque to Wall Street”... “neither workable nor comprehensive”... “foolish waste of massive taxpayer funds”... “eerily similar to the rush to war in Iraq”. Best of all was John McCain's comment: “When we're talking about a trillion dollars of taxpayer money, ‘trust me' just isn't good enough.”..." Times

bluepetey : admiral paulson...not having a good day...innit!

PREVIOUSLY ON KALETSKI VIEW

..."Does this hyperactivity mean that the world economy is on the brink of catastrophe? Or does it suggest that the credit crunch is now almost over, and that the world economy faces only a moderate slowdown or, at worst, a mild recession?

The risks are certainly greater today than they have been since the 2001 US and European recession – and for Britain the prospects seem dimmer than at any time since 1992. But is this really, as George Soros proclaimed, in an article for the Financial Times, “the worst market crisis in 60 years”?

The claim is unequivocally wrong, since the 20 per cent fall in share prices and the US mortgage problem cannot remotely compare with the crises that racked the world economy in the 1970s and early 1980s, when inflation and interest rates soared to 20 per cent, stock markets plunged by 80 per cent in real terms, big banks fell like ninepins and unemployment was double or triple the present level...." TIMES 28 jan. 2008 my emphasis

peteythesportswriter : unemployment still risin...innit!..DEflation likely innit!..markets inna wily e coyote moment...innit...

WAMULLA

PALOOKAVILLE FINANCIAL stardate capitulation day+8

JPMorgan buys WaMu

cnn : "In the biggest bank failure in history, JPMorgan Chase will acquire massive branch network and troubled assets from Washington Mutual for $1.9 billion.

A road to collapse

...WaMu had been one of the most hard-hit banks during the financial crisis after it bet big, like many of its competitors, on the strength of the housing market -- only to see its fortunes sour as housing prices fell.

Following several ratings agency downgrades this week and a freefall in the company's stock, many analysts were speculating that the endgame for the embattled savings and loan was imminent...." cnn

Central banks step in as bail-out fears mount

"The Bank of England moved to inject longer term cash into money markets as part of a co-ordinated effort with the US Federal Reserve, the European Central Bank and the Swiss National Bank, following the breakdown of talks over a $700bn bail-out for the US financial system...." FT

Telegraph : "After appearing earlier to have reached a deal, the seven-hour White House meeting, which was described by Mr McCain's campaign as "a contentious shouting match", broke up after a late rebellion by Republican right-wingers against the plan's huge price-tag.

Leading Democrats, including House Speaker Nancy Pelosi, reacted so angrily to the last-minute change in Republican demands that Henry Paulson, the Treasury Secretary, got down on one knee to beg them not to disclose how badly the meeting had gone, witnesses said.

Mr McCain, the Republican presidential candidate, was personally blamed by Harry Reid, the Democratic Senate Majority Leader. "John McCain did nothing to help - he only hurt the process," Sen Reid said...." my emphasis

THATS A SOUND O A MAN WORKIN ONNA CHAIN GANG

jeff :"Having failed to deliver victory in the War on Terror, President Bush is hoping for better luck in the War on Error. His goal is to limit damage from the egregious mistakes of sub-prime mortgages; his tactics are to carpet-bomb the banking system with federal funds. The upshot, in Jeffersonian terms, is that US taxpayers are about to be enrolled in an economic chain gang....

...In place of rip-roaring markets, according to a Wall Street trader, America has embraced "trickle-down communism". This system involves the state paying "cash for trash" to benefit a few miscreants, and then hoping that some of the taxpayers' largesse will trickle down to the masses.

...Toxic rubbish will not be made to disappear by Mr Paulson's proposals. All that will be different is ownership. It will be like removing nuclear waste from a failing business and parking it in a government building. The risk moves from private to public.

It is this form of regressive redistribution that Messrs Bush and Paulson are peddling as the road to redemption for Western finance. Excuse my cynicism, but would you buy a used derivative from either of them?

After Hurricane Katrina and the flooding of New Orleans, Mr Bush's record on rescue missions does not inspire confidence. As for Mr Paulson, if he's so insightful, why, when he was earning an $18 million bonus at Goldman in 2006, did he not spot the radio-active dump piling up in his industry's back-yard?... Telegraph

coolhandpetey : goin dahn nah boss...

THIS IS THE TRUTH

yo!...cop fo dis ...was ovva at mish's an ah seen this....

AS FALLS NIAGARA

yo! innit!... a week a long time inna BAILOUT...

PALOOKAVILLE FINANCIAL stardate capitulation day+7

Admiral Paulson anna salty dogs onna dorkship TITANIC...out of Wall St.
are fighting for the inflatable life rafts that have been stowed away under CONGRESS
for the inevitable FINANCIAL EMERGENCY...

the national debt is so huge now anyway that, the hope is, no one will notice another
7 BILLION...

...there is enough hot air in congress, they believe, to inflate well beyond these paltry figures...

onna good ship BLOGOSPHERE the maroon has gone up anna bloggin stiffs is tryin ta get the workin stiffs ta get onna 'phon ta their congressperson...an ammer em flat abaht a ears....... an get em ta stop paulie from sinkin a dollah.

a week after the MOTHER plan was launched a liquidity is solidified agin anna
banks wotz BUST is sh*ttin bricks waitin fo a 'flatables ta come rescue em...

ya BANKERS wot dunnit are clean away wiya BONUS so large an heavy atta workin stiffs is gettin restless an gon get a congress ta GET THE MONEY BACK OFFA EM...

meanwhile with the alien hedge funds glued together by the Lepage glue gun anna day traders slapped silly by a VENGERS a shock an scares is goin dahn wiya villa...

VIAGRA FOR NIAGARA

ya BOOM is BUST an a BAILOUT is all ya got ta save a TITANIC but even Cathy Berberian knows...

inna current onna niagara river a TITANIC is bein swep along atta evva faster rate...
a enjin gone DROOP an a moneh be needed fo VIAGRA ta STIFFEN resolve an RESTORE CONFIDENCE...says CAPTAIN BRUSH...skipper o a titanic wen she took a wrong course...

a THREE OFFICERS are countin anna pressure buildin up inna congress steam room, fromma meltdown, ta motivate a suckers ta cough up!

Jonathan Weil : Why Mark-to-Paulson Accounting Won't Save Banks

..."The plan goes like this: Treasury will pay financial institutions above-market prices for garbage assets nobody else wants. Then, through the magic of mark-to-Paulson accounting, everybody else that owns similar stuff will use those same prices, or marks, to value the trash on their own balance sheets.

Shazam! Banks and insurance companies write up the asset values on their books. They post big profits. Their capital goes up. Everyone gets fooled. And nobody knows the difference.

Except, we do. And that's why the plan probably won't work.

Still, give Paulson and Federal Reserve Chairman Ben Bernanke credit for ingenuity. At the same time banks are begging regulators to suspend mark-to-market accounting rules so they can avoid disclosing more losses, Paulson and Bernanke instead devise a way to abuse the same rules for the same banks' benefit.

Put It in Reverse

Under Paulson's plan, Treasury would hold so-called reverse auctions for financial institutions' troubled assets. Whoever submits the lowest bid gets to sell its junky assets to Treasury for cash.

While that might look like a competitive, free-market mechanism, it's not. Once the first bid in the first auction is submitted, it may not go much lower, and it probably will be much higher than the true market value.

That's because the real incentive for the banks isn't to sell their rubbish to Treasury and get cash. It's to watch the Treasury pay grossly inflated prices to others. That way, they can use those transactions for accounting purposes to mark their books to the Treasury's farcical market prices.

This presents another problem. The transaction prices coming out of these auctions may not meet the accepted definition of fair value. Under the Financial Accounting Standards Board's definition, fair value is the price ``in an orderly transaction between market participants.''.." Bloomberg..........

Kevin Hamlin : Asia Needs Deal to Prevent Panic Selling of U.S. Debt, Yu Says

Sept. 25 (Bloomberg) -- Japan, China and other holders of U.S. government debt must quickly reach an agreement to prevent panic sales leading to a global financial collapse, said Yu Yongding, a former adviser to the Chinese central bank.

``We are in the same boat, we must cooperate,'' Yu said in an interview in Beijing on Sept. 23. ``If there's no selling in a panicked way, then China willingly can continue to provide our financial support by continuing to hold U.S. assets.'' (my emphasis) - hat tip naked capitalism

bluepetey : AS FALLS NIAGARA...SO FALLS NIAGARA FALLS

capitulation posponed, gravity defied, fat lady....waitin...

am only waitin til a mornin comes...til a mornin commmmes...

THE NORTHERN ROCK

yo! domino politix innit!

PALOOKAVILEE SPORT : stardate capitulation day+6

..."gordon BROWN has turned himself into a DOMINO BANK in order to be able to draw upon the new squillion dollar BAILOUT courtesy of ADMIRAL PAULSON the American leader.

...short selling had been threatening to bankrupt his premiership and the whole of the shadow political system but this has, now, been banned by the SEC...

SAFE AS HOUSES

...there is, now, no chance of a challenge for the leadership as, should the domino BROWN fail, then no potential challenger will risk being the next domino to fall...."

petey : paulson bailout vacuum gun gon suck up alla toxic sh*t from a LABOUR ship wreck?

...nah at brown a bank he be protected from a market forces and his stock...
guaranteed by a FED...innit?

nouriel : "By requesting a status change from independent broker dealer to bank holding company, Morgan Stanley and Goldman Sachs have officially spelled the end of Wall Street as we know it. Within six months, all five investment banks – Bear Stearns, Lehman Brothers, Merrill Lynch, Morgan Stanley, and Goldman Sachs – have disappeared or are looking to merge with a commercial bank with a stable deposit base and permanent access to the Federal Reserve’s lender of last resort facilities. The unraveling of the $10 trillion shadow banking system that started with the non-bank mortgage lenders, SIVs and conduits – now with the seizing of major independent broker dealers and money market funds – is in full swing and gathering steam. Highly leveraged hedge funds might indeed be the next in line...."
The unraveling of the Shadow Banking System moves to hedge funds as Schmalpha replaces Alpha

MISH TO THE RESCUE

stardate : capitulation day+4

mish : ...Problem Defined

"Before one can work out a solution, the first step is to identify the problem. The problem is not a lack of liquidity, it is not a lack of trust, it is not lack of consumer confidence, it is not subprime lending, and in fact the problem is not housing at all.

The problem is consumers and corporations are deep in debt with no way to service that debt.

Attempts to bail out banks and brokers at taxpayer expense will do nothing but add to consumer debt, weaken the US dollar, and literally waste $700+ billion dollars that can and should go to more productive uses.

What Caused The Problem?

• The Fed
• Congress
• Fractional Reserve Lending
• The Treasury
  

The root cause of this problem is the Fed micromanaging interest rates, the Treasury cheerleading every step of the way, and Congressional sponsored spending that went wild. The critical issue that ties everything together is fractional reserve lending allows banks to borrow money (credit really) into existence with insane amounts of leverage.

To top it all off, Greenspan slashed rates to 1% fueling the biggest global housing bubble the world has ever seen. Congress needs to figure out a way to eliminate the Fed." mish

peteythepantywaist : nah!...why dint i think a that?

zooneh : cos yo jussa poxy painter dude from PALOOKAVILLE...wot lives inna garret wiya dog wotz half cat, a spider with 7 legs...anna rat wot think itta mouse!

PREZZA PAULSONs PERFECT PLAN

stardate : capitulation day+4

BBC : US banks make shock status switch

"The last two major investment banks in the US have changed their status to become bank holding companies, allowing them to take deposits from investors.

The move - part of a huge restructuring effort on Wall Street - will also give them access to Federal Reserve support."

Bloomberg : Dollar May Get `Crushed' as Traders Weigh Up Bailout

Treasury Secretary Henry Paulson's plan to end the rout in U.S. financial markets may derail the dollar's three-month rally as investors weigh the costs of the rescue.

The combination of spending $700 billion on soured mortgage-related assets and providing $400 billion to guarantee money-market mutual funds will boost U.S. borrowing as much as $1 trillion, according to Barclays Capital interest-rate strategist Michael Pond in New York. While the rescue may restore investor confidence to battered financial markets, traders will again focus on the twin budget and current-account deficits and negative real U.S. interest rates.

``As we get to the other side of this, the dollar will get crushed,'' said John Taylor, chairman of New York-based International Foreign Exchange Concepts Inc., the world's biggest currency hedge-fund firm, which manages about $15 billion...."

Bloomberg : Commodities Bottom as Speculators Vanish After Slump

"The worst may be over for commodities after the steepest rout since at least 1956 drove out speculators and the U.S. government unveiled a plan to end the worst credit-market seizure since the Great Depression.

The Standard & Poor's GSCI Index of commodities had the biggest three-day gain in 18 years, surging 8.4 percent through Sept. 19, the day U.S. Treasury Secretary Henry Paulson said the government will spend ``hundreds of billions'' to cleanse banks of mortgage-related assets. Crude oil rose 6.8 percent that day, while wheat and copper gained 3.6 percent...."

petey : will a falling dollar cause rising oil and commodities prices?

will this help the alleged recession?

new pigs inna trough man!

gold goin mad innit!...capitulation day postponed...innit!....fat lady gotta sock inner mouth........ fo nah...innit...!

p.s. don fo get a disclaimer atta top o a page...(don blame me fo doin stupid things..)

CARRY ON CRUISING

adubbly dub, dubbly dub, dobbly dubbly..dubbly dub..

yo! cappin pugwash innit!..

stardate capitulation day+4

we ere onna HMS PALOOKAVILLE..steamin outta sea to rescue survivors fromma SHIPWRECK.

the United Flakes Ship TITANIC out of Wall St. has hit a iceberg an come to a shudderin stop!

the TITANIC is holed below the water line and toxic sewage has polluted the atlantic.

Admiral PAULSON has vowed to save the vessel at ALL COSTS and sez that the TITANIC is unsinkable and therefore will never go down!

Catain wobbleya BRUSH was onna bridge atta time o da CRASH declarin VICTORY after the shock an awe.

wobbleya : it wan me wot dunniy! it were a shot sellers innit!

paulie : i gotta 7000,000,000 dolla vacuum gun annit gon suck...

bluepetey : willya lookit at? a great AMERICAN ECONOMY dead inna water...

the toxic sh*t fromma SEWAGE BANK inside a ship don become illiquid an the suckers canna git outa it!..

the brave little HMS PALOOKAVILLE has stood off at anchor because o da toxic pong! cappin pugwash has bailed out THE ROCK an is waving not drownin..he sez...

pugwash : don't panic...don't panic...

bbc :US banks make shock status switch

"The changes should enable Goldman Sachs and Morgan Stanley to raise more funds by opening commercial banks.

The move - part of a huge restructuring effort on Wall Street - will also give them access to Federal Reserve support..

THE MOTHER OF ALL BAILOUTS - 2

tthe TITANIC has sent outa S.U.S....save our suckers!....they daren't jump ship cos o the HARD LANDIN ...inna sh*t.. and are demanding a BAILOUT...

the PIRATES wot was runnin a sewage business have got away wi a BONUS in gold and are laughing alla way from a bank!

wobbleya : do summat paulie fo da sh*t set solida an crushes a conomy ta death...

paulie : we gonna OUT SUCK the suckers!...they ainta brick gon be standin onna brick...the sh*thouse gon be supported wi po workin stiffs doh!

wobbly : yo gottit paulie save our suckers man!..do it fo yo country...do it fo the election! but above all...do it fo me!

pugwash : pirates...junk...junks fulla pirates...yo ho ho anna bottle o rum...

IT ENDED ON WALL ST.... ?

bloomberg :

``The decision marks the end of Wall Street as we have known it,'' said William Isaac, a former chairman of the Federal Deposit Insurance Corp. ``It's too bad.''

Goldman, whose alumni include Henry Paulson, the Treasury Secretary presiding over a $700 billion bank bailout, and Morgan Stanley, a product of the 1933 Glass-Steagall Act that cleaved investment and commercial banks, insisted they didn't need to change course, even as their shares plunged and their borrowing costs soared last week.

By then, it was too late. As financial markets gyrated -- the Dow Jones Industrial Average whipsawed 1,000 points in the week's last two days -- and clients defected, executives at the two firms concluded they had no choice. The Federal Reserve Board met at 9 p.m. yesterday and considered applications delivered that day, said Michelle Smith, a spokeswoman for the central bank. The decision was unanimous, she said.

`Blood in Water'

``There's blood in the water in the industry and the sharks are circling,'' Peter Kovalski, who helps oversee about $10 billion at Alpine Woods Capital Investors LLC, said at the end of last week. ``It all comes down to perception and the current trust within the community.''

ft : Goldman, Morgan Stanley to become regulated banks

Goldman Sachs and Morgan Stanley, the last surviving big investment banks on Wall Street, have become regulated banks....

ft : Emerging markets face $111bn maturing debt

A $111bn backlog of bonds that need to be refinanced over the next year has built up in the emerging market economies and raised the threat of defaults and company closures.

With the ability to raise money in the debt markets severely restricted because of the credit crisis, emerging market banks and companies could struggle to roll over the maturing debt, according to ING Wholesale Banking.

nourial : The shadow banking system is unravelling

"Last week saw the demise of the shadow banking system that has been created over the past 20 years. Because of a greater regulation of banks, most financial intermediation in the past two decades has grown within this shadow system whose members are broker-dealers, hedge funds, private equity groups, structured investment vehicles and conduits, money market funds and non-bank mortgage lenders.

Like banks, most members of this system borrow very short-term and in liquid ways, are more highly leveraged than banks (the exception being money market funds) and lend and invest into more illiquid and long-term instruments. Like banks, they carry the risk that an otherwise solvent but liquid institution may be subject to a self ­fulfilling and destructive run on its ­liquid liabilities.

But unlike banks, which are sheltered from the risk of a run – via deposit insurance and central banks’ lender-of-last-resort liquidity – most members of the shadow system did not have access to these firewalls that ­prevent runs.... " FT

ambrose : Financial Crisis: America rises to the occasion as storm heads towards brittle Europe

An almighty crash has been averted, very narrowly. There is no guarantee that the revolutionary actions of the US government will prevent a full-fledged global slump, but at least we now have a fighting chance.

By taking the colossal wreckage of the credit bubble onto its own books in a $700bn (£382bn) taxpayer sink, Washington has forestalled a run on the world banking system, and may hopefully have saved the viable core of modern capitalism.

Hank Paulson's "Super Sink" is the "game changer" we have all been waiting for in this interminable crisis. It puts a floor under the toxic debt that is bleeding the banking system to death, and ends the downward spiral of CDOs, CLOs, HELOCs, and such instruments of leveraged excess that lie at root of the credit terror. No doubt the Fed, the Treasury, and Congress have made a string of mistakes but they are now rising to the occasion - the reflexes of a wounded but still formidable superpower. The US has shown time and again that it has the institutions and flair to pull itself out of disaster....." Telegraph

liam : Financial crisis: Default by the US government is no longer unthinkable

...."But, in the run-up to the US election in November, Democrats in Congress - and even some Republicans - may decide they're simply not having it. How much more can the US taxpayer take? It sounds insane, but the liabilities being taken on by the Fed and the US Treasury are now so enormous that the government itself could default. No?" Telegraph

more telegraph :Japanese megabank to buy up to 20pc of Morgan Stanley

Japanese megabank Mitsubishi UFJ Financial Group is to buy up to 20pc of Morgan Stanley, which along with Goldman Sachs has given up its status as an investment bank.

"We have decided on investment in Morgan Stanley," a MUFG spokesman told AFP. Although he declined to give any further details.

The deal was annouced as Morgan Stanley and Goldman brought the era of the Wall Street investment bank to an end by choosing to give up their independent investment banking status to gain easier access to funds to survive the financial turmoil....

...Giving up investment bank status gives Morgan Stanley and Goldman greater access to Federal Reserve funds and makes it easier for them to buy retail banks, but it will also subject the two to much tighter regulation....." telegraph

bluepetey : well me hearties...ahah!...innit? the plot anna sh*t thickens...the politix gon fix the boom wotz bust...gon fix a markets so they caint go down...gon fix the 'lection? fix a dolla?

dolla gon fall...commodities gon rise?

...when a wind blows...a cradle will rock...when a bough break..cradle will fall...

an dahn will come cradle...baby an all!

halfcat : ah swear, painty dude, yo one sad sackka sh*t man...yo paintin a saddo picture here!

bluepetey : aint painted it dude...it aint art..i jus photograph it!..it already there man!
yo caint make this stuff up!

THATS BETTER...INNIT..!

ALESSANDRA CELLETTI