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CitiGroup – Geithner never sleeps

Friday, March 13th, 2009

Story Here

Now that the US Government defacto owns CitiGroup, and Robert Parsons – a man with no experience in banking – is it CEO, what is the first major initiative that CitiGroup announces?  Going into the stock brokerage business in Vietnam, Malaysia, Indonesia and Thailand.

Did you know that President Obama’s mother worked for Timothy Geithner’s father in Indonesia?  Peter Geithner ran the SouthEast Asia Program for the Ford Foundation, and was their first representative to China.  Tim Geithner graduated from  high school in Thailand and is fluent in Japanese and Chinese.   Connecting any dots yet?

How is helping businesses in SouthEast Asia raise money to start businesses “saving American jobs”?

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Posted in Bankruptcy Watch, Financial Collapse, Politics, State of Fear, Timothy Geithner Watch | No Comments »

Giethner and China

Thursday, March 12th, 2009

Geithner wants G-7 to stop blaming China

One really interesting aspect of Dictator of Treasury Tim Geithner’s biography is that he lived most of his youth in Asia.  His father worked for the Ford Foundation handing out money, and his father had met Barack Obama’s mother, who worked for the elder Mr Geithner in Indonesia.

Timothy Geithner is fluent in both Japanese and Chinese.

Worrried yet?

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Posted in Politics | No Comments »

It isn’t working

Thursday, March 12th, 2009

Libor Creeping Up

Despite the central bank interventions to prop up failed banks and flood the world with close to zero percent money, the London InterBank Offer Rate (LIBOR) is going back up.  Almost all US Dollar denominated debt (like that owed by big US corporations and variable rate mortgages) is pegged to the LIBOR rate.   If LIBOR starts to really take off again (like it did last September), the global fat lady is singing.   The central banks our out of ammunition.   It’s time for triage.  Not eveyone is going to make it out alive.

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Posted in Bankruptcy Watch, Currency Watch, Financial Collapse | No Comments »

Making money by losing money

Tuesday, March 10th, 2009

Doublespeak here

Citigroup’s CEO Vikram Pandit caused a surge in the Stock market today with a “memo to employees” (Translation:  I’m not saying this to the SEC or directly to the public because if I’m not telling the truth, that becomes a criminal issue).

Once you read through the weasel word language (what is an “externally disclosed mark” that was excluded from the theoretical profit?), the substance comes down to – we made money because we have a $44 billion tax loss carry forward, that we will apply to future income.

This is the same thing that GM tried to do over the past few years – the reason their balance sheet fell apart was their auditors decided it is extremely unlikley GM has any chance of making a profit in the next 3 years – so those tax loss carryforwards were declared worthless and written off.

I believe today’s rally is a suckers rally.   Banks don’t make wealth – they just move it around.   Until Barack Obama and the Democrats drop the mantra that  profit=rich=evil=corrupt, this economy is headed nowhere.

*** Update ***

CitiGroup Execs make $4.4 million profit

Just before this “announcement” of a return to profitability, Citigroup executives bought up a bunch of their own stock.  This was probably completely innocent, but surely is going to invite an SEC investigation.  Tim Geithner says the SEC needs to regulate more.  Let’s see if he really means it – when it involves his personal friends at CitiGroup.

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Posted in Financial Collapse, Politics | No Comments »

GE, BofA sell $18B in FDIC debt

Monday, March 9th, 2009

Bloomberg Story

Just a day after the FDIC announced it may be insolvent this year – and with responsible smaller banks crying foul (We’re paying for the mistakes of the reckless banks), GE Capital (which was NOT a bank) has issued $8B in bonds guaranteed by the FDIC and BofA (which recently said it was a mistake to accept TARP funds) has issued $8.5B in FDIC backed loans because Credit Default Swaps on their own lending is getting too expensive (because people selling the swaps believe the chance of default is going up).

If CitiGroup is allowed to fail, there is really no doubt the FDIC goes with it.  All the cards are on the table now, and the United States is holding a pair of 3s and bluffing – and the other people at the table know the cards we are holding.

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Posted in Bankruptcy Watch, Currency Watch, Financial Collapse, Politics | No Comments »

Want to buy 36 radio stations for $1,000?

Friday, March 6th, 2009

That’s for all 36 stations, not for each one.  Details here

Davidson Media group had acquired these stations over time – they mostly low power stations in small markets in the Southeastern US – carrying Spanish language programs or gospel music.

Sanjay Sanghoee has stepped forward and agreed to pay $1,000 to buy the entire company – AND responsilbity for the $2 billion in debt that was used to acquire these stations.

Who is he?  Here is his description from the web site for his novel about corporate crime and corruption.

“Sanjay has an MBA from Columbia Business School and was an investment banker with Lazard Freres and Dresdner Kleinwort Wasserstein. He also worked from 1992-1995 with Strategic Intelligence Network, Inc., a spinoff from Kroll Associates. During his time with SINI, he was involved in all facets of corporate investigative work, including liaising with ex-law enforcement officers to conduct due diligence on business transactions.”

and his book was about:

“Set in the secretive world of multi-billion dollar mergers and ruthless plays for money and power, Merger takes readers behind the closed doors of Wall Street to witness the shocking dealings of corrupt CEOs and unethical bankers who violate the public trust for their personal gain – similar to the real-life incidents at Enron and WorldCom. ”

Feel free to connect any dots you see.

Posted in Bankruptcy Watch, Financial Collapse | No Comments »

GE Credit watch

Friday, March 6th, 2009

Bloomberg Story

Back when I was in college in the mid 1970s, I was taught that General Electric was a good substitute for the entire US Stock Market (this was long before SPDRs and index mutual funds).  GE had their hands in so many different businesses that it was as diversified as a single company could get.  One of the things GE owns is NBC Telemundo, which owns MSNBC, which Keith Obermann owns.

Another thing GE does (through GE Capital)  is invests money in commercial real estate, home mortgages and investments in Eastern Europe, which is falling apart faster than the United States.  One of the strategies GE Capital has to keep itself “cash flow positive” is to raise the rent rates on its empty shopping centers and vacant office space.

Back before it was apparent that Candidate Obama would become President, GE’s common stock was trading around $36 a share.  It’s now around $6 a share.  If GE goes under, the fat lady is truly singing.  Good job Mr Obermann.

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Posted in Bankruptcy Watch, Financial Collapse | No Comments »

FDIC to borrow its way to solvency

Friday, March 6th, 2009

The “solution” to the FDIC being insolvent is for the US Treasury to loan the FDIC $500 billion (It currently insures around $4 trillion sitting in bank accounts – probably more by now)

The problem with this?  The total revenue the FDIC raises by assessing a fee to banks on their insured deposit accounts is $2 billion a year.  It takes a long time to pay back $500 billion at $2 billion a year.

To dig the hole deeper, part of the mortgage cram-down bill’s language (probably to blackmail the American Banker’s Association into supporting it) is making the “temporary” insurance limit raise from $100k to $250k per account permanent.

The stupidity and unintended consequences continue.

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Posted in Financial Collapse, Politics | No Comments »

Don’t catch a falling knife

Thursday, March 5th, 2009

One of the “rules” of investing is don’t try to stop a falling market by trying to stand in its way.  It’s the fast path to poverty.

Yesterday, China decided to follow the prosperity through spending model of Obama/Geithner and announced a large spending program to boost its economy causing the world markets to go up around 3%

Apparently, they have realized the folly of their ways and said “no more”.  Today the free fall continues – down 3.5% before noon, and heading straight down.

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Posted in Financial Collapse, Politics | No Comments »

Bankruptcy Watch – Masonite

Wednesday, March 4th, 2009

Bloomberg Story

Not a huge surprise since they mostly make and sell counter tops for new houses.   With 19 million empty houses, unless there is a huge influx of new immigrants, demand for new houses will be very slow for at least a decade.

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Posted in Bankruptcy Watch, Financial Collapse | No Comments »

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