Dr King's courage & "saluting" the cowards

Today is Martin Luther King, Jr. Day in the US where the nation honors a courageous man who wasn't afraid of adversity, difficulties or challenges; a man who spoke direct and forthright with words of conviction and sincerity.  And since Wall St. is closed today,  we decided instead we would draw comparison by focusing the areas where few to none possess Any of Dr. King's traits:  finance, investing, politics, banking and media

And we 'honor' these people a with sarcastic 'toast'--

The Sour MiLK face Salute!

A coward by definition is a person or entity which lacks courage in facing danger, difficulty, opposition, pain, etc.; to be timid or easily intimidated.  Anyone who fits this criteria, deserves the Salute, but because we don't wish to write endlessly for hours to compile such a list, here are mere highlights...

** All Quotes below in blue font are from Dr King...

"A nation or civilization that continues to produce soft-minded men purchases its own spiritual death on the installment plan."

To Fitch credit rating agency -- For not having the courage or 'balls' to downgrade France's undeserved AAA credit rating until 2013 when it was obvious to anyone with open eyes that their finances are a complete mess, but were afraid of criticism and blowback from Europe.

"The hottest place in Hell is reserved for those who remain neutral in times of great moral conflict."

To S&P credit rating agency -- For while getting credit for downgrading France when Fitch would not, you still get the 'Salute' for only downgrading one notch, allowing that lying ferret Sarkozy and other french leaders the opportunity to minimize your downgrade and thus minimize the significance of your agency.  A two-notch downgrade would have had Europe's leaders and banks in a much deserved Panic.  Instead, you punted.

"Life's most persistent and urgent question is, 'What are you doing for others?'


To Goldman Sachs --  The most despicable, Evil corporation in the US, if not the world, which is really saying something when compared to all the other multinational corporations and banks such Bank of America, JP Morgan Chase 100% financially propped up by the Treasury & Fed i.e. US taxpayers.  While commonplace that corporations donate to both parties to 'hedge' their bets so in the loop no matter who is President, it still is pretty Pathetic that you were Obama's #1 financial supporter in '08 and still donate heavily to his re-election campaign and Yet are the #1 donor to Republican challenger Mitt Romney's campaign, already giving him over $300k in donations and it not even the end of January.

Double MiLK face Salute to you...

"A genuine leader is not a searcher for consensus but a molder of consensus."

To President Obama -- Who seems to have forgotten that his political party affiliation is Democrat and the vast majority of those who support the Party have nothing but hate and mistrust for Wall St, and expect their leaders to represent them- the middle class & working people.  The American people also desire justice and fairness-- under your leadership, not one vile scumbag Wall St big-wig has been arrested, cuffed and humiliated like Bernie Madoff and former IMF head Dominique Strauss-Kahn was.   Your Dept of Justice has failed or refused to indite anyone that matters in this economic criminal enterprise and that's on you Mr President as much as your Attorney General.

"Every man must decide whether he will walk in the light of creative altruism or in the darkness of destructive selfishness."

To all Republican nominees -- Who refuse to talk about the US economy in their speeches and debates unless to criticize the President.  They are either too gutless or clueless to come up with real solutions to get millions of people back to work in good paying jobs that will allow the American Dream to continue.  Cutting corporate taxes and those on the rich don't solve anything-- they simply get liars and phonies elected.

"All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence."

Creating jobs means taking risks- you as a business owner are hiring people and expanding your business in the hope that you will be able to sell enough product or service to make that hiring economically beneficial.  And if it doesn't work out and the economy is still in a rut, you as the owner are forced to let people go.  Cowards do not make good business owners.  They make for great politicians though. Honestly-- how can cowardly politicians seeking election, re-election or a nice Presidential library be built for them, ever have the courage and strength to risk innovative ideas to get people working when every aspect of who they are is controlled by 'handlers' who tell them everything from what to say to what color tie to wear?

Think about that..

"Faith is taking the first step even when you don't see the whole staircase."

To Greece's leaders -- For not having the courage to default and leave the Eurozone a long time ago.  Yes, the conversion back to the drachma would have been painful and securing foreign loans & credit even more so, but think of it this way- your beautiful nation is in such horrible circumstances now that it still will end up defaulting if not pushed out of the EU, and you experienced an additional 12-18mths of needless pain for nothing.  What you did is akin to ignoring and stalling treatment of a tooth needing root canal

"He who passively accepts evil is as much involved in it as he who helps to perpetrate it. He who accepts evil without protesting against it is really cooperating with it."

To CNBC --  I guess I could include Bloomberg & Fox Business but CNBC is the Worst at being lying propagandists for Wall St and finance.  As an entity they are more corrupt than North Korean TV.  Here's the CNBC mantra:  When stocks go up, encourage more buying.  When stocks go down, encourage viewers to buy more.  And when market plunges, tell viewers its best to 'hold', then wait for bottom and invest Hard!  Everything is a buying opportunity.

Everything is a money making opportunity to CNBC  And yet they state at end of show segments that investing is a risk and essentially if you lose Everything, don't blame or sue them.  Everyone who appears on the network including guests all are uber-capitalists who are blindly loyal to free market and trickle-down as the Only way to preserve freedom and save the economy.  Of course its not, but that's the kool-aid they push.  No one criticizes the Fed or US economic policy itself for the depression we're in- they're all too ingrained in the System

"There is nothing new about poverty. What is new is that we now have the techniques and the resources to get rid of poverty. The real question is whether we have the will."

Global Investors -- Nope, we didn't forget about them.  In some ways the most disgusting, putrid cowards of them all.  When things are going well and they're making huge profits off their investments, you will not meet a more Arrogant and Cock-sure person.  And when they start losing money and the market drops too far and too quick for their liking, they are the Biggest Babies, screaming for the Fed to enact Quantitative Easing and any other policy that will help them recoup their money at the financial expense of their countrymen and women. And when they do invest, most of the time it is not based on logic or analytical data, but rather on fear and how the masses are reacting.

Every day the investor wakes up with one singular goal- to make money; to have more at the end of the day then at the start.  They are sociopaths.. they are scum.  They are investors.

Well, like we said, we could have written for hours upon hours... Soooo many cowards in the realm of finance, banking, investing, politics and the media.

So many to MiLK face Salute... only one MLK

"We who in engage in nonviolent direct action are not the creators of tension. We merely bring to the surface the hidden tension that is already alive"

The Chuzpah Is Staggering.......

But not unexpected and somehow admirable.....As predicted earlier the Fed & Treasury have "decided" that converting preferred to common equity is equal to "adding" capital.... Read "Redefinition Accomplished" Spin Continues....."Preferred To Common Equity Edition" with straight talk from Barry, Kasriel & Winkler why this is "bogus"...... Let´s hope that the banks that have passed the test are able to attract as much "smart money" as fast ( window of opportunity probably short lived ) as possible...The taxpayer needs a break..... Update: Wells Fargo, Morgan Stanley Boost Capital After Stress Test



Die Dreistigkeit der Fed und des Finanzministeriums ist schon fast wieder bewundernswert..... Wie bereits früher prognostiziert wird ein Großteil der Mrdlücken die der eh schon realtiv stressfreie Stresstest zu Tage führen wird lediglich durch eine Form der Bilanzakrobatik "bereinigt"..... Empfehle den nachfolgenden Link "Redefinition Accomplished" Spin Continues....."Preferred To Common Equity Edition" der für jedem mit gesundem Menschenverstand aufzeigt das diese Art der Rekapitalisierung nicht gerade "vertrauenserweckend" ist.....Bleibt zu hoffen das zumindest die Banken die den Test bestanden haben in der Lage sind genügend "Smart Money" schnell genug ( befürchte das die Bedingungen nicht dauerhaft so gut sein werden ) einszusammeln.... Der Steuerzahler kann dringend etwas Hilfe gebrauchen..... Update: Wells Fargo, Morgan Stanley Boost Capital After Stress Test





Bank of America Said to Need About $34 Billion in New Capital

May 6 (Bloomberg) -- Regulators have determined that Bank of America Corp. requires about $34 billion in new capital, the largest need among the 19 biggest U.S. banks subjected to stress tests, according to a person familiar with the matter.

Citigroup Inc.’s shortfall is more limited because the company already plans to convert government preferred shares to common stock

, people familiar with the results said. JPMorgan Chase & Co. doesn’t need a deeper reserve against losses, according to people familiar with that company’s result.



The banks may outline their strategies to add capital, or in other cases buy out government stakes, after the Federal Reserve publishes the stress tests results tomorrow.

Firms requiring more capital could raise all the funds through conversions of preferred shares

if they choose, according to people familiar with the matter.

“To the extent that there are banks that need capital, our hope is that many of them will be able to raise that capital through either private equity offers or through conversions and exchanges of existing liabilities,” Federal Reserve Chairman Ben S. Bernanke

told lawmakers at a hearing in Washington yesterday. “The data we have are accurate reflections of the financial conditions of those banks.”

Banks that want to return money injected by the Treasury since October must show they can borrow from private investors without a Federal Deposit Insurance Corp. guarantee,according to people familiar with the matter.

> This will be the real stress test for Goldman ( Goldman Sachs has sold $18.6 billion of debt under the TLGP program, the sixth-highest amount among banks ) & Co ...... This would be a real sign of confidence when they are able to fund themselves completely without FDIC backed funding..... The latest bond yielded 410 basis point higher than Treasuries ( Goldman Sachs Sells $2 Billion of Notes Without FDIC Guarantee .... No wonder when you take a closer look at the "quality" of earnings ( see A Few Goldman Highlights........)



> Denke das wird der echte Stresstest aus Sicht der Banken und insbesondere Goldman Sachs ( haben momentan 18,6 Mrd an besicherter Anleihen ausstehen ).... Sollte Goldman in der Lage sein zukünftig darauf zu verzichtn wäre dies in der Tat auch ein von mir anerkanntes Signal der Stärke. Die letzte Anleihe ohne Garantie würde mit einem Spread von 410 Basispunkten gegenüber Staatsanleihen gepreist. Keine wirkliche Überraschung wenn man sich die Zusammensetzung der letzten Ergebnisse mal etwas genauer ansieht ( siehe A Few Goldman Highlights........)



> I´ll close with this comment......



> Verasbschiede mich mit dieser Bemerkung......



U.S. Banks' Not-So-Stressful Test WSJ

Finally, the government has effectively said it wants banks to have Tier 1 common stock equivalent to 4% of risk-weighted assets. First, investors have to decide whether they have confidence in the risk weightings.



Then they must decide whether 4% -- which still translates into 25-to-1 leverage -- is safe for the unpredictable environment we are in.

A Few Goldman Highlights........

More risk, more leverage ( & some kind of "creative accounting" - see end of the post ) ....... Brilliant!

Mehr Risiko, höherer Hebel ( & ein klein wenig "kreative" Buchführung - siehe Ende des Postings ) ..... Hat ja in der Vergangenheit erstklassig funktioniert.... Rechnet man mal die Jahre 2007 und 2008 heraus......

Reuters

A measure of the bank's trading risk, average daily value-at-risk, surged to $ 240 million in the first quarter of 2009, compared with $157 million for the three months ended February 28, 2008, implying that the bank took more trading risk

Goldman also disclosed that it has set aside $168,901 per employee on average for compensation in the quarter, almost 35 percent more than in the first quarter of the previous fiscal year

Bloomberg

Total assets on the balance sheet rose 5 percent from the end of November to $925 billion as of March 27. Of that, about $59 billion qualified as “Level 3” assets, which are the hardest to value, down from $66 billion at the end of November

For more details see Goldman Sachs Press Release

Für weitere Details bitte einen Blick in die Goldman Sachs Press Release werfen.

This from Zero Hedge fits perfectly.....

Diese Beobachtung von Zero Hedge paßt wie die Faust aufs Auge.......

A very interesting data point, also provided by the NYSE, implicates none other than administration darling Goldman Sachs in yet another potentially troubling development. The chart below demonstrates the program trading broken down by the top 15 most active NYSE member firms. I bring your attention to the total, principal, customer facilitation and agency columns.larger/größer

Key to note here is that Goldman's program trading principal to agency+customer facilitation ratio is a staggering 5x, which is multiples higher than both the second most active program trader and the average ratio of the NYSE, both at or below 1x.

The implication is that Goldman Sachs, due to its preeminent position not only as one of the world's largest broker/dealers (pardon, Bank Holding Companies), but also as being on the top of the high-frequency trading/liquidity provision "food chain", trades much more often for its own (principal) benefit

Also on the same topic via EconompicData

Zum gleichen Thema von EconompicData

If Goldman's Selling... Beware of Buying

Goldman's principal trading amounted to 20%+ of all program trading reported on the NYSE, up from between 3-5% one and two years back. In other words, leading up to a period when Goldman may be issuing several billion dollars in an equity offering, their own principal trading has amounted to 4-5x more volume than what had been typical, in an illiquid market, potentially driving up the value of financial equities in the process... interesting.

larger/größer

I think this comment from Jesse´s Cafe Americain nails it....

Ich denke der nachfolgen Kommentar von Jesse´s Cafe Americain faßt es ziemlich gut zusammen......

The bulk of their profit purportedly came from speculative trading for their own accounts, using 'cheap FDIC guaranteed funds.

There will be no recovery in the real economy until the financial system is reformed and banks are restrained into productive functions within our society.

Make also sure you visit this piece from Floyd Norris and his commensts from the conference call ( seeThe Case of the Missing Month ) or this little rant via Barry Ritholtz How to Puff Up Earnings, Goldman Sachs Style.......

Denke das ein Blick in den Kommentar von Floyd Norris zum Conference Call auch nicht schaden kann ( siehe The Case of the Missing Month). Um das "positive" Bild von Goldman abzurunden noch ein kleiner Rundumschlag von Barry Ritholtz ( siehe How to Puff Up Earnings, Goldman Sachs Style )......

Goldman’s 2008 fiscal year ended Nov. 30. This year the company is switching to a calendar year. The leaves December as an orphan month, one that will be largely ignored. In Goldman’s news release, and in most of the news reports, the quarter ended March 31 is compared to the quarter last year that ending in February.

The orphan month featured — surprise — lots of writeoffs. The pre-tax loss was $1.3 billion, and the after-tax loss was $780 million.

No surprise to hear this update on via Norris......

Diese Erläuterung hinsichtlich der Aufsicht im Update von Norris dürfte keine wirkliche Überraschung sein.....

What About That Other $28 Billion?

Goldman Sachs, as you know by now, wants to return that $10 billion in TARP money it got. And what about the $28 billion it borrowed in the credit markets with a guarantee from the federal government?

A spokesman tells me that Goldman has no plans to pay that back early. Nor will it say if it would have been profitable had it reported on the quarter ended in February, as it traditionally has.The spokesman did tell me something I would have included in my earlier Goldman blog had I known it, that the change in fiscal year was required when it converted to a bank holding company.

The bank regulators did not, however, force Goldman to avoid any mention of the December orphan month in the text of its earnings release, instead relegating it to a table deep in the announcement.

> What esle do you expect from a regulator that is labeling a giant hedge fund like Goldman as a bank.... ;-)

> Was soll man auch anderes von einem Regulierer erwarten der einen gigantischen Hedge Fonds wie Goldman Sachs den Bankenstatus zuspricht.. ;-)

Congratulation ( NO SARCASM ) to Goldman for placing the shares at $ 123 Goldman Sachs Raises $5 Billion to Repay TARP Funds The same kind of "creative" accounting in 2008 and the stock would have tanked 50 percent withing a day...... But at least this time it is the so called smart money ( lets hope not too many pension funds are involved.... ) and not the taxpayer on the hook.....Clearly a sign that the euphoria level is close to a peak ( Here is more evidence of some kind of exuberance ) .....

Man muß Goldman zu der Dreistigkeit gratulieren ( Diesesmal ohne Augenzwinkern ). Die haben es tatsächlich geschafft Ihre Aktien zu 123 $ zu platzieren ( siehe Goldman Sachs Raises $5 Billion to Repay TARP Funds ). Hätten die es noch vor einem Monat gewagt eigenmächtig Bilanzierungszeitrahmen abzuändern und so den äußerst verlustreichen Dezember praktisch aus dem Blickwinkel der Öffentlichkeit zu "verbannen" hätte sich die Aktie wohl binnen 24 Stunden halbiert...... Hoffe inständig das es noch weitere Unternehmen schaffen private Gelder mit welchen Methoden auch immer an Land zu ziehen..... Dann ist zumindest der Steuerzahler ( vorausgesetzt die Pensionskassen haben sich zurückgehalten ) nicht allein der Dumme....... Denke das zeigt einmal mehr das die aktuelle Marktstimmung etwas zu euphorisch ist Hier ein weiterer Beleg für eine zumindest "ausgelassene" Stimmung.......

Goldman recommends short selling Washington Mutual

I hope this is not from the same analysts that drove WM with his neutral rating down from close to $40 for the last few years ...... At least they woke up and cut to a sell in February. Why they have still a price target close to 10 is beyond me. With massive dilution already in place & on the way & no earnings in sight for years only "Wall Street Finest" are able to come to such an accurate number...... At least they have the balls to call a stock a short candidate. To my knowledge a very rare event. Too bad that they missed the easy money from $40 to $12..... Short interest in WAMU is already close to 20 percent ..... And when i start reading comments like this via Morgan Stanley Draaisma: “2008 the Best Period for Shorting Since 2002″ you have to ask where were those guys during 2007.......... One more similar story during this afternoon and i´m viewing this as an contrary indicator and i´m starting to get bullish....... ;-)

Ich hoffe das dies nicht derselbe Analyst ist der WM mit seinem neutralen Rating über mehrere Jahre und Kursen von ca $ 40 nach unten geritten hat. Immerhin haben die im Februar endlich auf Verkaufen gestellt. Um bei einer so gewaltigen Verwässerung sowie keinerlei Aussicht auf Gewinne in absehbarer Zukunft und nachweislich einem des übelsten Managements auf ein KZ von $10 kommen kann ist wohl nur erfassen wenn man zum inneren Zirkel von "Wall Street Finest" gehört Die nächste KZ Reduzierung kommt dann wohl mit der nächsten Kapiaterhöhung..... Immerhin haben Sie "die Eier" eine bestimmte Aktie als Short zu brandmarken....Kommt ja nicht alle Tage vor. Blöd nur das dieser Rat nicht $30 früher gekommen ist.... Short Interest beträgt bereits jetzt satte 20% ...... Wenn ich dann noch Ratschläge wie diesen von Morgan Stanley lese Draaisma: “2008 the Best Period for Shorting Since 2002″ muß man sich schon fragen wo der im Jahr 2007 Urlaub gemacht hat..... Noch eine solch geartete Meldung mehr an diesem Nachmittag und ich werde bullish... ;-)

Goldman recommends short-selling Washington Mutual

Goldman Sachs recommended short-selling Washington Mutual in a note to clients on Friday, and cut its price target to $10 from $12. "The bad news is that our new product-by-product analysis of its mortgage portfolio suggests $17 billion to $23 billion of embedded losses in WaMu's current book of business, of which only $3 billion have been absorbed so far; subsequently, we forecast a $14bn provision charge in 2008," the broker said. The good news is that it believes WaMu's $7 billion capital raise should be sufficient, seeing a year-end tangible-equity-to-tangible-assets ratio in excess of 7%.

Let´s hope the chinese Walls have prevented a conflict of interest......

Bleibt zu hoffen das die Chinese Walls innerhalb von Goldman funktionieren.....

What A Difference A Week Made....Credit Suisse Discovers Another $ 2.85 Bilion "Fair Value Reduction"

As one who has listened to the entire conference call from Credit Suisse just one week ago i can assure you that this will spook the markets. Credit Suisse was besides Deutsche Bank and Goldman Sachs viewed as one of the big winners during the turbulence. But there was always doubt that their numbers might be too good to be true...... Credit Suisse is proving that this might be the case..... Should be very bad news for the confidence in the marketplace overall...... I assume the "arrogance" from the Credit Suisse management won´t be as obvious as during the last call...... Stock tanking 7 percent......

Als einer der sich vor einigen Tagen die Telefonkonferenz angehört at bin ich mir sicher das diese Meldung hohe Wellen schlagen wird. Bisher galt die Credit Suisse zusammen mit der Deutsche Bank und Goldman Sachs als einer der Gewinner der Marktturbulenzen. In der Vergangenheit sind immer wieder Zweifel aufgekommen ob "die Zahlen nicht zu gut sind um wahr zu sein" ...... Credit Suisse liefert hier eine Steilvorlage für diese Vermutung......Ich bin mir zudem sicher das die "Arroganz" von Seiten des Managements während der nächsten Telefonkonferenz sicher nicht wieder so ausgeprägt sein wird wie letzte Woche .... Aktie zur Eröffnung 7% tiefer......

Thanks to Randy Galsbergen

Credit Suisse Further to its commitment to provide transparency, Credit Suisse today announced that in connection with the operation of ongoing control processes, it has undertaken an internal review that has resulted in the repricing of certain asset-backed positions in its Structured Credit Trading business within Investment Banking.

The current total fair value reductions of these positions, which reflect significant adverse first quarter 2008 market developments, are estimated at approximately USD 2.85 billion (having an estimated net income impact of approximately USD 1.0 billion).

In the first quarter to date, we estimate we remain profitable after giving effect to these reductions. The final determination of these reductions will depend on further results of our review and continuing market developments. We will also assess whether any portion of these reductions could affect 2007 results. Finally, our internal review, which has identified mismarkings and pricing errors by a small number of traders in certain positions in our Structured Credit Trading business, is continuing.

> Here the Full Year Results from Feb. 12th & Webcast

Qatar was maybe a little bit premature....

Sieht ganz so aus als wenn einige Investoren heute leicht erhöhte Temperatur haben werden.....

Qatar fund buys Credit Suisse stake

The QIA’s move comes after Credit Suisse posted robust fourth-quarter results underscoring its resilience during the credit crisis,......

Goldman:Aug level 3 asset value $72.05B, 7% of total

Add the level 2 component and you have well over 50% of assets that are "not transparent"..... If you want to read more on this issue read Level 3 " Mark-To-Make-Believe Gains" & Level 2 "Mark-To-Model" or surf the labels....

Wenn man jetzt noch die Level 2 Bestandteile addiert kommt man auf satte 50% plus X der Vermögenswerte die nicht transparent nachvollzogen werden können. Mehr zu diesem Thema Level 3 " Mark-To-Make-Believe Gains" & Level 2 "Mark-To-Model" sowie unter den Labeln

Thanks to Bespoke

via Marketwatch Goldman:Aug level 3 asset value $72.05B, 7% of total

...the size of its level 3 assets at the end of third quarter increased to $72.05 billion from $54 billion at the end of the second quarter.

Goldman Sachs said level 2 assets at the end of third quarter amounted to $494.6 billion. There may be some market activity for level 2 assets but the valuations often depend on internal models

Goldman Sachs disclosed that the net unrealized gain on level 3 derivative contracts amounted to $2.62 billion in the third quarter, saying the gains resulted from changes in level 2 reclassification as opposed to level 3 changes

In connection with its lending activities, the firm had outstanding commitments to extend credit of $135.53 billion as of August, compared with $100.48 billion at Nov. 30 fiscal yearend

> Goldman is up 45 per cent since its low on August 15th.......... I´ll stay with gold and the miners......

> Seit dem Tief vom 15.08. hat Goldman u.a. dank dieser Bilanzierung mal eben 45% zugelegt........ Ich für meinen Teil bleibe lieber beim Gold und den dazugehörigen Minen......