AIG ALL OVER AGAIN, ZIRP JAPAN FALLS FURTHER

Due to the health problems of my husband, I couldn’t leave the house the last three days.  So I couldn’t cover the anti-bank demonstrations.  If anyone here went to these, please let me know if you have pictures, a report?  By the way, the guy working for AIG for only $1 is a Goldman Sachs guy who has millions in GS stocks.  Like all the guys working for GS, he ‘volunteers’ to do things that actually are things that bails out GS, not the US.

AIG CEO Ed Liddy Has $3 Million In Goldman Sachs Stock

Who’s the biggest beneficiary of the AIG (AIG) bailout?

 

No, not AIG — which is a penny stock — but Goldman Sachs (GS) which was one of the firm’s biggest counterparties.

Now where was CEO Ed Liddy before he arrived at AIG… that’s right, he was a boardmember at Goldman. And he still has a considerable stake in his former company….This is an awful situation for Liddy to be in. His interests aren’t aligned with either the taxpayer or AIG (given his $1 salary), they’re only aligned with AIG’s big counterparties.

 

Now, why wasn’t this top information when Liddy volunteered to fix AIG?  I disagree with the Clusterstock.com reporter who thinks this is an ‘awful’ situation for Liddy to be in ‘conflict’ with GS.  This is the sole reason he stepped up to the plate!  He had to do this to save his own fortunes!  In his own situation, there is NO conflict at all!

 

But for us, there is a huge conflict of interests.  He worked long and hard to convince everyone, we had to fund 100%, the counter-party deals and all this taxpayer-backed money flowed straight into GS.  Their stocks shot up in value very rapidly, once the money began to flow, unhindered, from Treasury IOUs based on future taxes, to Goldman Sachs.

 

By the way, I want to remind all readers that the story about GS suing a bunch of jerks who set up a website DELIBERATELY to bait GS, this is a publicity stunt.  They knew they were violating GS copyrights and they knew GS would send the usual corporate lawyer letter and they know they will ditch the site, they have done this before, in the past.

 

When I was really served by a real letter for reporting the real news, note that NO ONE IN THE MEDIA said a peep about this.  I did NOT make the news, at all.  Unlike the Goldman Sachs 666 clowns, I was not breaking the law at all.  I welcomed the case but the lawyers dropped it because….they knew I would win my case.  

 

These guys, on the other hand, are not being suppressed due to giving real information that is correct and honest, they are pulling a mere stunt and a lot of people fell for this.  There are so many important things going on, being led on wild goose chases by frauds is a waste of time and energy.

 

When the Cash 4 Gold people attacked me, I went after them, hard.  They left me alone because I was not breaking any laws or even misreporting facts.  I am very proud of being able to walk this tightrope.  It is not easy.  But note that no media hound dogs wanted to report Cash 4 Gold’s attempt at silencing me!  

 

For all the conspiracy lovers here, this is how it really works!  I am attacked, no news.  Some jerk with a crummy background does something illegal, but which is SIMILAR to what I do all the time, legally, the media will turn that person into some sort of ideal, an example, something NEWS worthy!  While I am ignored when I have real news.  Got it now?  Thanks in advance.

 

Timberjay Newspapers Online

So, how angry should you be with AIG? In short, you should be furious, and it has nothing whatsoever to do with those undeserved bonuses.

On the long list of incompetents and villains at the center of our financial crisis, AIG is in a class by itself. While there were many players in this mess, AIG did more than any single entity to spread the rot originating in bad mortgages to virtually every corner of the financial system.

It is much worse: banks no longer held loans or put up capital.  All insurance organizations ended up, also doing business with NO CAPITAL.  The government ran debts upwards with NO SOVEREIGN WEALTH.  

Oddly, AIG accomplished this herculean task by selling insurance. Or, to be more precise, pretending to sell insurance, to banks and investment houses on Wall Street. You’ve probably already heard of AIG’s credit default swaps. They were those all-too clever derivatives that were supposed to protect these big financial players if their investments in risky pools of mortgages and assorted consumer credit hit the fan.

It is pretty obvious to me that the problem was, everyone tried to believe that derivatives were wealth.  It is pretty simple.  I will explain below.

These default swaps were a relatively new product for AIG, which had long sold traditional, solid insurance products, all of which are typically highly regulated, and respectably profitable. But when the company hired Joseph Cassano, a financial shark who got his start under the notorious Michael Milken, all that changed.

Cassano, who took a leading role in AIG’s Financial Products Division, saw selling credit default swaps as the road to untold riches— and it was, for a while. Over the course of seven years, up until 2008, AIG sold an estimated $500 billion in credit default swaps. During that same period, Cassano received roughly $280 million in compensation.

The trouble was, AIG never really backed any of these swaps, as would have been required had these products actually been regulated as insurance. Typically, an insurance company is required to maintain a certain level of ready assets sufficient to back its liabilities in potential claims. But as we’ve since learned, that’s not how things worked at AIG with its credit default swaps and for that we can thank the Commodity Futures Modernization Act, a bipartisan disaster authored by Republican Sen. Phil Gramm, of Texas, and signed into law by President Bill Clinton in late 2000.

 

The Derivatives Beast has two interesting characteristics: it can grow to infinity easily and it requires zero capital to fund its growth!  Bingo!  This is, in a nutshell, the entire business of the global financial collapse.  

 

The entire world saw two things at the same time, both interacting very heavily with each other: the creation and feeding of the Derivatives Beast and the introduction of 0% lending via the Bank of Japan.  

 

The Derivatives Beast is a modern recreation of a Ponzi scheme.  And the 0% financing of debt is unheard of in history since the first mud brick was laid on the foundation of the City of Ur, 8,000+ years ago, at the dawn of agriculture and city building.

 

Always, when someone lent something, they had to have something real to lend and expected more than simple return of the borrowed things.  For example, parents don’t ask children for interest on money spent on them or lent to them.  There is this implicit inter-generational debt the parents expect the children to do, namely, help the parents in their old age. 

 

The sudden flow of easy-term loans out of the Bank of Japan coupled with the creation of the derivatives market that was totally unregulated and thus, didn’t have any rules forcing them to base this on actual capitalist profits, the whole thing became a 100% leveraged debt machine from hell.  And it finally broke.

 

Japanese Stimulus Adds to Debt – washingtonpost.com

To recover from a global downtown that has hurt Japan more than any industrialized nation, Prime Minister Taro Aso announced on Friday his third and largest stimulus package since coming to power last September. At a cost of $150 billion, it brings the total amount of new spending to $270 billion, about 5 percent of Japan’s gross domestic product.

Japan poured red ink over the entire planet and this enabled them to enlarge their trade footprint until it was the size of Godzilla. This tiny country became the world’s #2 economy and vied with Germany to have the world’s highest trade profits. When the debt machine broke down due to a complete lack of capital in the US system, Japan’s export trade collapsed. “Our prime objective is to prevent the economy from falling through the floor,” Aso said. Most of the stimulus packages will be paid for with borrowed money, increasing Japan’s mountain of public debt and forcing the government to raise taxes when the economy recovers. At about 170 percent of GDP, the country’s debt is the highest among wealthy countries.

ARRRGH! This is where the G20 has to step in and punish Japan! The world’s #2 FOREX holder of US dollars is going to NOT use its sovereign wealth to fix things! No, they are adding debt to the mountain of debt that is higher than Fujiyama! When the Japanese debts are more than 200% of their GDP, this mountain of debt will erupt and cause global destruction. The world’s second-largest economy shrank an alarming 12.1 percent on an annualized basis in the fourth quarter of 2008, a contraction that was twice as severe as that of the United States. Japan’s economy probably fared even worse in the first quarter of this year, government officials say.

Japan has to hold US dollars so the yen can be weak.  The US and Japan yap at China over holding US dollars in reserves so the yuan can be weak.  Obviously, Japan’s solution for trade is now biting back, hard.  And doing what they did in the past will make the next downturn much, much worse.

 

Just as the US, trying to run all systems on a zero-capital basis is also heading to a major and total collapse.  Until we figure out the difference between DEBT and CAPITAL, we are on a course set to destroy our entire civilization.

 

Fed Said to Order Banks to Stay Mum on ‘Stress Test’ Results – Bloomberg.com

 

The U.S. Federal Reserve has told Goldman Sachs Group Inc.Citigroup Inc. and other banks to keep mum on the results of “stress tests” that will gauge their ability to weather the recession, people familiar with the matter said.

Citigroup and Goldman Sachs always are mum about their real affairs!  Duh!  They don’t like the news lately because common people on the street are beginning to notice them and are thinking about taking action of some sort. 

The Fed wants to ensure that the report cards don’t leak during earnings conference calls scheduled for this month. Such a scenario might push stock prices lower for banks perceived as weak and interfere with the government’s plan to release the results in an orderly fashion later this month.

Welcome to the Plunge Protection Team!  Why does our government give two hoots about GS stock values?  Eh?  Seriously.

“If you allow banks to talk about it, people are just going to assume that the ones that don’t comment about it failed,” said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia.

 

The government can help us all by honest reporting.  For example, the President of the US can tell Congress, it is totally wrong for the Federal Reserve to be owned and run by JP Morgan and the Rothschild consortium, just for example.  He can then ask Congress to vote to terminate the Fed and move the function back to Congress where the Constitution originally placed it.

 

Then, he can ask Congress to investigate Fort Knox to see what is there and to have US Marshals take over the Bank of New York….hahaha.  The banks are all bankrupt so it is time for the sheriff to come in and padlock the doors and the government must send in people to go over the books and see what is cooking there.

 

Note how the ‘mark to market’ business collapsed the banks!  This was slowly pushed into being by the BIS people and as the banks were forced to place realistic values on all their bonds they claimed, were AAA, it quickly appeared that the AAA was really BBB minus!  Instead of fixing the false values, the government joined with the gnomes and pirates to undo the ‘mark to market’ rule and now the banks are back to lying bastards again.

 

So of course, this ‘exercise’ of testing the banks is really an exercise in futility!  They will sit on the data like hens on eggs until the eggs smell too much but by then, everyone will have forgotten about the tests, or that is the hope.  Now, back to Japan to see our own future:

 

Aso’s Stimulus Plan May Spur Economy at ‘Massive’ Future Cost – Bloomberg.com

 

The plan unveiled yesterday by Prime Minister Taro Aso, who faces elections this year, is aimed at creating jobs in an economy heading for the worst recession since 1945. Equal to 3 percent of gross domestic product, the measures will add to debt that the OECD already forecasts will rise to 197 percent of gross domestic product next year.

“The stimulus will probably prevent Japan from falling apart in the short term, but it will leave a massive bill for the future,” said Hiromichi Shirakawa, chief economist at Credit Suisse Group AG in Tokyo. “The package doesn’t do anything to promote a sustainable economic recovery.”

 

Both the US and Japan want to create jobs.  Both want to change nothing. Both want a ZIRP system.  Both want to not use real capital while creating jobs.  Now, people may make fun of Karl Marx, but he patiently explained the connection between labor and capital and how they intertwine with each other.  Capital needs labor and labor needs to tap into capital so they can purchase industrial output and increase tax revenues [it being much easier to tax the workers compared to taking rich and powerful entities!].  

 

6a00d83451c0bf69e200e55361dad68833-800wi1Piling on public debt while not sharing capital with the workers leads to a collapse in sustainable economic growth.  Japan has capital, by the way.  But will not touch one penny of this because the yen will then rise rapidly against the deep-in-debt dollar!  So they have to hold this paper trash until the US collapses.  Japan needs the US and can’t survive without the US but is unwilling to be honest with the US so we get this problem where both nations are falling off the same cliff, clinging to each other.

Now, let’s jump back to the GS news:

 

Goldman Sachs Stock Sale, TARP Repayment, Might Pressure Rivals – Bloomberg.com

 

A Goldman Sachs Group Inc. sale of stock to speed repayment of $10 billion in government money will pressure other banks to follow suit or risk appearing dependent on federal support, analysts said.

The last thing on earth the GS gnomes want is a bunch of outsiders prying into their affairs.  So they have decided the US loans are crap.  They want us to capitalize them so they can ravage us in return.  So rats on them!  They can go to hell, as far as I am concerned.

The New York-based bank, scheduled to report earnings April 14, is considering announcing the share sale as early as next week, the Wall Street Journal reported today, citing unidentified people familiar with the matter. Lucas van Praag, a spokesman for Goldman Sachs, declined to comment.

As always, they don’t want to clue us in.  Remember: due to them and their ilk, markets are totally rigged games.  When we short them, they outlaw shorts, for example.  All systems are, as we saw earlier about the bank tests, rigged.  The fear of dropping the stocks of GS are the overriding factor.  

A 47 percent gain in the company’s stock price this year and a return to profitability in the first quarter may help Chief Executive Officer Lloyd Blankfeinraise new money, analysts said. That might let Goldman Sachs, the sixth-biggest bank, return the $10 billion it received in October from the U.S. Treasury’s Troubled Asset Relief Program and shake off compensation and hiring restrictions imposed on banks that took government aid.

Destroying the US in order to drive up GS stock is criminal.  Arrest all of them.  

“It’s in Goldman’s best interest to be free from the TARP,” said Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York. “But just because it’s best for Goldman Sachs, doesn’t mean their repayment is in the best interests of the broader U.S. economy.”

 

HAHAHA. Never, ever does ‘best interests of the broader US economy’ ever enter the dark, labyrinthian minds of the Gollum Sachs gnomes.  This is what they think:  ‘My Precioussssss…’

 

China Loans, Money Supply Jump to Records on Stimulus (Update1) – Bloomberg.com

 

China’s new lending surged more than sixfold from a year earlier to a record 1.89 trillion yuan ($277 billion) in March, adding to signs that growth in the world’s third-biggest economy is gathering pace.

China has been going about the planet, spending their Sovereign Wealth Funds.  Unlike Japan. More about this, later.

M2, the broadest measure of money supply, grew 25.5 percent, the central bank said on its Web site today. That’s the fastest since Bloomberg began compiling data in 1998 and more than the 21.5 percent median estimate in a survey of 12 economists.

We should thank them.

President Hu Jintao said April 1 that China’s 4 trillion yuan stimulus plan was taking effect, after urban fixed-asset investment surged 26.5 percent in the first two months. China’s lending boom contrasts with the struggle in the U.S. to rid banks of illiquid assets and efforts by central banks from Switzerland to Japan to unfreeze credit.

 

They are buying stuff.  We need someone to do this.  So the Chinese are doing this.  Their reward is for the US and Japan to screech even louder, ‘The Chinese are evil!’  But then, we can’t buy things, we can only borrow things and Japan is the ZIRP headquarters on earth which are killing our entire global financial systems.  Thanks.

 

China, Kazakhstan May Sign $10 Billion Accord for Oil (Update1) – Bloomberg.com

 

China, the world’s second-biggest energy consumer, may agree next week on lending $10 billion to Kazakhstan in return for the right to take a stake in an oil producer in the Central Asian country.

China National Petroleum Corp. plans to buy a minority holding in AO Mangistaumunaigas from state-run KazMunaiGaz National Co., a China National official said yesterday. The two nations may sign an accord on April 15 when Kazakh President Nursultan Nazarbayev visits Beijing, the official said, declining to be identified because of internal rules.

China should tap its $1.95 trillion in currency reserves to help domestic companies buy overseas exploration rights, Zheng Xinli, a deputy director at the policy research office of the ruling Communist Party, said in March. The nation’s oil imports climbed to a one-year high in March, according to customs data.

 

See?  We have to bomb, terrorize, brutalize or make alliances with brutal dictators like the ones in Arabia, to get oil.  China buys it.  We lose trillions of dollars in overhead costs, doing it our way.  The Chinese use capital and buy it.  See?  Simple.

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One response to “AIG ALL OVER AGAIN, ZIRP JAPAN FALLS FURTHER

  1. Pingback: AIG ALL OVER AGAIN, ZIRP JAPAN FALLS FURTHER | Business Credit

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