International Banking :

[Aman A.K.A. Ahamburger]

So it looks like Lagarde is out in front. Apparently she is leaning toward the German solution. Greece maybe even PIGS "hair cut" and euro close to if not on par with USD before 2013 now..

[bimetalaupt]

May 21, 2011 1:29:47 GMT -5 Aman A.K.A. Ahamburger said:

So it looks like Lagarde is out in front. Apparently she is leaning toward the German solution. Greece maybe even PIGS "hair cut" and euro close to if not on par with USD before 2013 now..

Yes, But I hear there is a real call for the German to get the job because France has had it 4 times and the last was French...This could be the thorn in the Greek bond problems.. the 10 years are now at 16%.. Sounds bad but the worst is yet to come per???

later, Numbers do not match the Greek bonds need to back.. French are joining the Finns, Germans and Lux to fight more money down the drain of the PIIGS..

Just a thought,
Bi metal Au Pt..

Sorry it looks like an over nighter.. Dog and Pony show Monday.Well we are also doing the thing with taking from the Social Network to pay our bills.. Long term the USA is know as cheap benefits but solvent.. Per the LUX..

Attachments:

[Aman A.K.A. Ahamburger]

Yes, But I hear there is a real call for the German to get the job because France has had it 4 times and the last was French...This could be the thorn in the Greek bond problems.. the 10 years are now at 16%.. Sounds bad but the worst is yet to come per???

later, Numbers do not match the Greek bonds need to back.. French are joining the Finns, Germans and Lux to fight more money down the drain of the PIIGS..

It's about time. I hope the German gets the job.

I think your right about the thorn. The head of the IMF being canned is defiantly a black swan and the euro bank industry...

[Aman A.K.A. Ahamburger]

This is why, IMO, it's a bit different than 30 this time B.. I Hear you about the black swans, but we have had a lot of flushing already. Some place haven't.. Interesting article from the FT..

Urbanisation and cheap credit fuel growth:
www.ft.com/intl/cms/s/0/6973e458-8498-11e0-afcb-00144feabdc0.html#axzz1N8b15q8Q

By John Paul Rathbone

Published: May 20 2011 18:34 | Last updated: May 22 2011 19:22


Shortly after the 9/11 terrorist attacks, two years after the dot.com bust and at a time when US interest rates were at a record low, a leader in the Economist magazine argued that only rising house prices in the US and Europe were saving the world from a stiff recession.

Less than a decade later, and despite a humongous property crash that has left everyone swearing “never again”, house prices are doing it again. Only this time it is not a credit-fuelled housing boom in the developed world that is rescuing the global economy. It is property in the developing world.

Prime urban housing in China has doubled in price in three years. In India, tycoon Mukesh Ambani recently moved his family into a $1bn Mumbai home, complete with three helipads.

Rapid urbanisation, abetted by cheap credit, lies behind the boom. Global interest rates are at record lows, over half the world’s 7bn population now lives in cities, and the UN forecasts that another 1.4bn people will join them in the next two decades.

There is huge unsatisfied demand for homes in the developing world. But as real assets, “land and housing are very prone to speculation”, says Paul Romer, a Stanford University economist.

That is especially so when money is cheap. After allowing for inflation, interest rates are negative across many emerging markets. Such conditions, particularly in China, are ideal for the creation of bubbles, Mr Romer says.

The property boom is apparent in any economy that is urbanising fast or is rich in the commodities needed for building. That mostly means the emerging world, but commodity-rich Australia and Canada have also been drawn in.

Median Sydney house prices are now 10 times median incomes – making them the world’s most expensive after Hong Kong, according to Demographia, the consultancy. In Canada, website crackshackormansion.com invites web surfers to tell the difference between a drugs den and a $1m Vancouver home.

House prices are bubbling the most where there is a limited supply of choice properties, as with Rio de Janeiro’s beachfront apartments, Mr Ambani’s 27-storey Mumbai home or refurbished colonial mansions in Colombia’s Cartagena.

But it is not only wealthy buyers who are pursuing the conspicuous consumption that accompanies every financial bubble. In Brazil, where a near-doubling of private sector credit since 2007 has prompted a consumption boom, house prices in some police-pacified Rio slums have doubled in three years.

However, the focal point of the urbanisation boom is China, which has an estimated 65m vacant properties. Their construction coincides with the “greatest level of bank lending in the history of the world”, says Bill Rhodes, the veteran Citi banker. In 2009, total Chinese credit expanded by almost half of gross domestic product. In 2010, it repeated this feat.

Whether China faces an imminent property crash is hotly debated. Defenders argue it lacks the leverage and mortgage securitisation that sparked the US subprime crisis. But “subprime is a straw man”, counters Edward Chancellor, fund manager at Boston-based GMO. “The leverage simply lies in China’s credit growth.”

The latest world housing boom shares many of the hallmarks of its predecessor. Last time, the boom was said to be “different” because bankers and policymakers knew what they were doing. This time it is seen as “different” because China’s government knows what it is doing.

Last time, the main financial constraint was the size of bank balance sheets – hence the growth of off-balance sheet structures.

Now the financial constraint has been removed by near-zero US interest rates. This has unleashed a tsunami of international liquidity. Since 2007, gross global central bank reserves have risen by 56 per cent or $3,300bn, according to the International Monetary Fund.

It also provided cheap funding for the world’s “shadow banking system”. In Asia, the combined issuance of corporate loans, bonds and equity is now almost double the 2007 credit bubble peak, according to Deutsche Bank.

State-owned banks have added fuel to the fire. After the global financial crisis, Brazilian development bank BNDES doubled lending between 2007 and 2009. State Bank of India did much the same.

Meanwhile in China, private sector debt has risen to 178 per cent of GDP, according to rating agency Fitch, a level comparable to troubled eurozone countries. As with all booms, urbanisation promises huge wealth. Some of the promises are based on reality. Caterpillar, the world’s biggest manufacturer of construction equipment, now gets two-thirds of its sales from outside the US.

But some of the boom is based on hope. To be sure, structural forces such as demography and rising global prosperity make increased urbanisation inevitable. However, of China, Mr Romer says: “The crux . . . [is] the factors that can make land either more valuable, or more of a bubble. It is difficult to tell the difference.”

Cheap money has accelerated the process. If the script plays out like other booms, eventually the bubble will burst.

Plus it's not just a property bubble they have a huge civil bubble to deal with as well, China will buy all the bad debt from europe they have to, IMO.

[Aman A.K.A. Ahamburger]

China to buy Europe bail-out bond:
www.ft.com/cms/s/0/0033bc70-86eb-11e0-92df-00144feabdc0.html#axzz1NX3DWd4o

By Peter Spiegel in Luxembourg

Published: May 25 2011 18:00 | Last updated: May 25 2011 18:00



Asian investors including the Chinese government are expected to represent a “strong proportion” of the buyers of Portuguese bail-out bonds when the eurozone’s €440bn rescue fund begins auctioning them next month, according to senior fund officials.

Klaus Regling, chief executive of the European Financial Stability Facility, told reporters on Wednesday that Beijing was “clearly interested” in the Portuguese auctions and that he expected China to participate.

He argued the intense interest from Asia and other international investors showed renewed confidence in the future of the euro as a currency.

But Mr Regling acknowledged that the primary motivation of Asian investors was to find new, safe investments into which to put their growing cash piles, rather than any endorsement of how Europe has handled the debt crisis in some eurozone countries.

“[Asia] is a region that has money to invest in the rest of the world,” Mr Regling said. “They don’t want to go only into one currency. They don’t want to go only into one asset class . . . They look at us and come to the conclusion it’s a good way to diversify.”

Chinese officials have expressed interest in investing in European assets as a way to diversify holdings in their sovereign wealth and other investment funds, which have historically concentrated on dollar-based assets. While Beijing has acknowledged it remains a significant holder in Portuguese and Greek sovereign bonds, Chinese officials have been reluctant to disclose where in Europe it will make investments.

Christophe Frankel, EFSF chief financial officer, confirmed that China had participated in its January auction, which raised cash for Ireland’s bail-out, but declined to disclose how much Beijing had invested.

China’s involvement in the triple A rated bonds issued by the bail-out fund could be an indication Beijing is focusing on ultra-safe assets rather than more risky sovereign bonds for countries such as Ireland, Portugal and Greece.

European Union leaders have voiced hope that Chinese purchases of such sovereign bonds could help reverse market sentiment against Europe’s “periphery”.

Mr Regling spoke ahead of what is expected to become the busiest month yet for the bail-out fund, set up last year in the wake of Greece’s debt implosion.

It will hold its first auction to raise funds for the recently approved €78bn Portuguese bail-out in mid-June, a €3bn to €5bn offering that will auction the fund’s first 10-year bonds.

The EFSF is expected to hold a second auction for Portugal by the end of the month, which will also raise up to €5bn. The second auction will be for bonds of five-year maturities.

The move, coming soon after the bail-out was approved by EU finance ministers last week, reflects Lisbon’s urgent need for cash, with nearly €10bn in debts coming due by the middle of next month.

Mr Regling said there would be no further auctions of bonds for Ireland until after this summer, at the earliest, reflecting the negotiations over the interest rates for Ireland’s bail-out loans and delays in Dublin’s recapitalisation of its debt-burdened banks.

[bimetalaupt]

Its Tippy,
Well.. I have my hat in the ring...We will see..

Bi Metal Au Pt

[Aman A.K.A. Ahamburger]

Aren't you doing something with the bund?

[Aman A.K.A. Ahamburger]

Iceland.. The truth will set you free.. ;D

Iceland Ex-Premier Charged, Could Others Follow?
www.cnbc.com/id/43336607

Geir Haarde, Iceland's former prime minister, has been charged with criminal negligence over his part in the collapse of the country's banking sector in 2008, the first credible attempt to hold a head of government accountable for the failures in oversight that led to the global financial crisis.

The banking crisis and economic downturn has brought down governments - most recently Portugal - and seen others lose at the ballot box. However, none to date has been hauled before a court.

"This is of course a unique thing here for us, and would have been absolutely inconceivable before the crisis," Eirikur Bergmann, director of the Centre for European Studies at Bifrost University in Iceland told CNBC.com.

"Some people see this as part of the recovery process, part of getting out of the mess, trying to properly analyze what happened and trying to hold people accountable. But at the same time, other people feel that this is merely a political vendetta, a political court. There are very mixed feelings in the country on this process," Bergmann said.

"This is really difficult for Iceland. Iceland is a really small society and this is one of the things that is ripping the society apart a bit."

Iceland's economic boom was fuelled by the creation of a large and leveraged financial sector that grew rapidly and became internationally acquisitive. The banks accumulated vast liabilities in foreign currencies and, when the global financial crisis hit, the country's small central bank was unable to act, as other central banks were, as a lender of last resort.

Iceland's banks, while possibly still solvent, were caught in a liquidity crisis that the government could not help them out of. Within two weeks in 2008, Iceland's three biggest banks – Glitnir, Landsbanki and Kaupthing – went into receivership.

That November, the International Monetary Fund and the Nordic countries – Denmark, Finland, Sweden and Norway – prepared a 4.6 billion euro ($6.7 billion) bailout of Iceland.

The collapse of the online bank Icesave, a unit of Landsbanki, caused diplomatic tensions, with the Netherlands and the UK insisting on repayment of the 4 billion euros lost by customers in their respective countries. In two referendums, in 2010 and 2011, Icelandic voters rejected a government plan to pay back the debt.

Without a global reserve currency or the huge liquidity reserves of the Eurozone behind it, the growth of the banking industry in Iceland was reckless, economists Willem Buiter and Anne Sibert wrote in 2008.

"If Iceland was unwilling to take that step (and join the euro), it should not have grown a massive on-shore internationally exposed banking sector," Buiter and Sibert wrote.

This was clear in July 2008, as it was in April 2008 and in January 2008... We are pretty sure this ought to have been clear in 2006, 2004 or 2000. The Icelandic banks’ business model and Iceland’s global banking ambitions were incompatible with its tiny size and minor-league currency, even if the banks did not have any fundamental insolvency problems."

Iceland is returning to the capital markets this week for the first time since the banking crisis and, whether charging its former prime minister is catharsis or a real desire for accountability, its other attempts at reform are on track, according to the IMF. The Fund released a fresh tranche of its loan last Friday, and said that it expects the country to return to growth later this year.

"Obviously the sooner Iceland can return to markets the better," Julie Kozak, the IMF's mission chief for the country told reporters earlier this week. "It's a very strong signal of a normalization of Iceland's relationship with international capital markets and that's an important signal and it's important for confidence going forward."

Critics say that Iceland's high unemployment rates – currently around 7.5 percent, according to the IMF's 2011 World Economic Outlook – as well as its need to remove capital controls and the ongoing concerns over the Icesave debt, could weigh on its attempts to raise fresh capital.

Barclays Capital [BARC-GB 259.85 -0.10 (-0.04%) ], UBS [UBS 18.38 0.18 (+0.99%) ] and Citigroup [C 37.77 0.96 (+2.61%) ] are leading the sale of the anticipated $1 billion issue.

Whether Iceland's image is rehabilitated or not, the precedent set by Haarde's negligence charges could have far-reaching effects, Bergmann told CNBC.com.

"It speaks to the whole financial crisis worldwide. What happened in Iceland isn't greater than what happened in other places. The devastation here is not greater than the devastation felt in Ireland, Portugal, Greece, even parts of the UK. So of course this is in some way a precedent in how countries can deal with a crisis of this magnitude," he said.

"I guess the feeling is that it is the government's job to set up the framework around the financial system, in a way that it can't collapse the whole economy, and if it is proven negligent in that, it should be held accountable."

Iceland created one hell of a problem for THEMSELVES!

[bubblyandblue]

International finance is a fascinating thing. It consists mainly in borrowing money to repay money previously borrowed.

[bimetalaupt]

Jun 10, 2011 10:37:35 GMT -5 @bubblyandblue said:

International finance is a fascinating thing. It consists mainly in borrowing money to repay money previously borrowed.

Bubbly and blue,
I thought International Finance had more to do with the cash needed to get your drugs on the ship and national finance had more to do with getting them off..Or was that getting the Junk made in China on the ship..

Now what you are talking about is called the Carrie Trade.. I buy your recycled paper with a 9% interest that you underwrite with money from Ben B. I paid 0.09% for and use this it leverage bond purchase as Tier1 capital to buy Greek bonds that 24% interest...now taken at full face value to leverage up to the Spanish Bonds at 15% interest.. Knowing the German government will have to pay the interest.. OK I paid 13 (13% par ) for the Greek bonds and take a 40% hair cut.. IE sell them for 60.. or make a 47% + 25% profit on par but I paid 13...

Now that I have booked the profits by bank is selling for a of 35%, Growing at 47% a year and has a 97% ROE.. SELL !!! Before the system falls..

An old time trader told me the real reason he made money was .. I sell too soon..

Just a thought,
Bruce

Attachments:

[Aman A.K.A. Ahamburger]

Now that I have booked the profits by bank is selling for a of 35%, Growing at 47% a year and has a 97% ROE.. SELL !!! Before the system falls

Well if that old man was doubling his money and selling too soon, he was a wise old man!

[bimetalaupt]

Jun 10, 2011 22:53:37 GMT -5 Aman A.K.A. Ahamburger said:

Now that I have booked the profits by bank is selling for a of 35%, Growing at 47% a year and has a 97% ROE.. SELL !!! Before the system falls

Well if that old man was doubling his money and selling too soon, he was a wise old man!

He earned a living during the depression scaleping the Cotton market.. Buy in the AM when the farmers sold if they had a buyer and sell to the mills in the evening when the mills bought. All on borrowed money..

Key.. When the price hit his target .. sell.. stocks.. bonds.. cotton or options( warrants)..Do not increase risk by delaying...He died single and rich..

Bi Metal Au Pt

[Aman A.K.A. Ahamburger]

He died single and rich..

But not wealthy, but at least we can learn how to make a little cash off of him.

[Aman A.K.A. Ahamburger]

Of course I was assuming he didn't have a family. Maybe he was wealthy..

Some interesting views on banking. Good points. The shadow need loans to the economy to get things going. Good thing we have confirmation of at least some money starting to flow that way.

Inflation Or Deflation? Follow the Money Supply
www.benzinga.com/11/06/1180378/inflation-or-deflation-follow-the-money-supply-guest-post

[bimetalaupt]

Jun 20, 2011 2:33:38 GMT -5 Aman A.K.A. Ahamburger said:

Of course I was assuming he didn't have a family. Maybe he was wealthy..

Some interesting views on banking. Good points. The shadow need loans to the economy to get things going. Good thing we have confirmation of at least some money starting to flow that way.

Inflation Or Deflation? Follow the Money Supply
www.benzinga.com/11/06/1180378/inflation-or-deflation-follow-the-money-supply-guest-post

A++,
The point I hear the most negitive about today is how full of it Ms/ France is about the financial state of the banks in Germany and France...They alow will need 250 Billion EURO Fresh Tier1 Capital.. All of the Banks owned by the German states are technology behind and insolvent.. They need capital and revamping.

It is a real mess and no one is doing any like what DKS did!!...

Just a mess,
Bi Metal Au Pt
I think they lost their Marbles.. Glass Marbles!!

Attachments:

[bimetalaupt]

Sept 10, 2011 22:15:40 GMT -5 bimetalaupt said:

Jun 20, 2011 2:33:38 GMT -5 Aman A.K.A. Ahamburger said:

Of course I was assuming he didn't have a family. Maybe he was wealthy..

Some interesting views on banking. Good points. The shadow need loans to the economy to get things going. Good thing we have confirmation of at least some money starting to flow that way.

Inflation Or Deflation? Follow the Money Supply
www.benzinga.com/11/06/1180378/inflation-or-deflation-follow-the-money-supply-guest-post

A++,
The point I hear the most negitive about today is how full of it Ms/ France is about the financial state of the banks in Germany and France...They alone will need 250 Billion EURO Fresh Tier1 Capital.. All of the Banks owned by the German states are technology behind and insolvent.. They need capital and revamping.

It is a real mess and no one is doing any like what DKS did!!...

Just a mess,
Bi Metal Au Pt
I think they lost their Marbles.. Glass Marbles!!

[bimetalaupt]

I believe that the aggregate M3 consists largely of savings type accounts which reflect past activity (velocity), in loans & investments. The growth in these accounts does not perpetuate the circuit income velocity of funds. They are a concurrent indicator, not a future indicator.

After posting this with Flow I think it is best with International Banking as it is about trust and what we see is only a THESAUD of solvency.. It is about trust with little information.. Or as the risk taker would say. Monte Carlo simulation and very SIMULAR to the Social Security investment Trust.

I have answers to that.. True but M3 is where the banks get the assets for longer term loans.. They have told me that this is what will power the economy.. It had been down 10 % and that overpowered the M1 increase the Federal Reserve added.

I understand from this that we could see more loans in the very near term from the stronger banks that have say 12.5% Tier 1 capital.. Most of the Federal Credit Unions around Abilene,TX have about that amount as does two of the very strong oil and farming banks in the area.

As far as velocity of funds goes , yes we see a lot more in Cash or M1 but the banking systems do not look at M1 as loanable due to the high speed of the velocity.. I have been told by bankers at the Deer Hunts over the last two years.. My advanced Economic class for my MBA (E-689) was about the dynamics of money.. It is all about trust and the world has looked at fancy bank building thinking that was a proof of solid financial health.. Sure not true with the Knickerbockers Bank of New York.. Remember seeing the pictures of it in 1907 with a line of depositors a block long around the Roman styled White designed Bank. It was all image and not quality assets...

The Knickerbocker Trust, chartered in 1884 by Frederick G. Eldridge, a friend and classmate of financier J.P. Morgan, figured at one time among the largest banks in the United States and a central player in the Panic of 1907. As a trust company, its main business was serving as trustee for individuals, corporations and estates. Eldridge was the founding president; he was succeeded in the 1890s by Robert MacClay, with Charles T. Barney as vice president. When MacClay retired in 1897, Barney was elected president. The New York City bank was housed in a Roman-style temple designed by McKim, Mead, and White and erected between 1902 and 1904 (illustrated) at the northwest corner of 34th Street and Fifth Avenue.[1] Stanford White's design allowed for the possibility of adding nine storeys of offices upon the structure, but they were never realized.[2] It had branch offices at 60 Broadway, in Harlem and The Bronx.

In 1907, its funds were being used by then-president Charles T. Barney in a plan to drive up the cost of copper by cornering the market. This gamble came undone due to the dumping of millions of dollars in copper into the market to stop a hostile takeover in an unrelated organization. This became public, and on October 21 the National Bank of Commerce announced that it would stop accepting checks for the Knickerbocker Trust Company, triggering a run of depositors demanding their funds back. Charles Barney requested a meeting with J.P. Morgan to discuss financial assistance for the bank, but was rejected. Because of this and the failure of the bank, he shot himself on November 14, 1907.
The resulting Panic of 1907 exacerbated an ongoing decline in the stock market that saw the Dow Jones Industrial Average lose 48% of its value from January 1906 to November 1907. The banking crisis is also seen as the final straw that led Congress to form the Federal Reserve System in 1913.

The company reopened some weeks after its forced closing and paid off all depositors in full with interest. In 1912 its assets were acquired by the Columbia Trust Company, forming the Columbia-Knickerbocker Trust Company. This entity was acquired by the Irving Trust Corporation in 1923, which was in turn acquired by the Bank of New York in 1989.

The building was enlarged by ten stories in 1921, and the façade completely redesigned in 1958, with its signature pilasters covered over; it still remains but its original form is unrecognisable

THIS LOOKS WHAT THE ECB IS TRYING.. PUTTING ON A GRAND THESAUD TO A WEAK SYSTEM OF THE EUROPEAN UNION WITH FOUR VERY WEAK MEMBERS.. LIKE BETTING ON THE PRICE OF COPPER...

JUST A THOUGHT,
Bi Metal Au Pt

[bimetalaupt]

Draghi’s Hands May Be Tied on ECB Stimulus
www.bloomberg.com/news/2011-09-11/draghi-may-struggle-to-deliver-on-ecb-stimulus-as-stark-resigns-over-bonds.html
Mario Draghi may find it harder to keep the European Central Bank in the vanguard of the battle against the euro region’s debt crisis after Juergen Stark resigned in protest at the bank’s bond purchases.( THIS IS THE SAME PROBLEM AXEL WEBER HAD.. BOTH ARE CORRECT AND GERMANY WILL TAKE A HUGE HIT TO THE CREDIT RATING IF THEY BUY PIIGS' BONDS..IMHO)

With speculation of a Greek default heaping pressure on the ECB to step up its bond buying and reverse interest-rate increases to ease market tensions, Stark’s shock move has publicly exposed a rift among policy makers that may undermine its ability to act quickly, economists said. German opposition to further ECB stimulus may also make Draghi less inclined to ease policy when he takes over from ECB President Jean-Claude Trichet on Nov. 1, said Marco Valli, chief euro-area economist at UniCredit Group in Milan.

“It would be very easy for Germans to say here comes the Italian, he’ll cut rates and buy government bonds in massive amounts,” Valli said. Draghi “will probably prefer to err on the side of hawkishness on standard measures, which means he may be reluctant to go for a rate cut.”

The ECB has shouldered the main burden of fighting the crisis as governments dithered over fixing their budget deficits, restructuring their banks and giving more firepower to the region’s rescue fund. Investors last week dumped stocks and pushed the euro to a six-month low on renewed fears that policy makers will fail to prevent a Greek default. Stark’s resignation on Sept. 9 further unsettled markets by raising doubts about the ECB’s commitment to do what’s needed to hold the 17-nation euro zone together.

THE THOUGHT ARE MORE ON LONG TERM 175 YEAR STIMULATION PACKAGES LIKE LUDWIG II CASTLE BUILDING PROGRAM THAT LEFT GERMANY WITH THREE OF THE BIGGEST INCOME PRODUCING PROPERTY IN THE WORLD.. LIKE HOVER DAM OR BROOKLYN BRIDGE.. HE TOOK A BACKWATER PART OF BAVARIA AND MADE IT THE HOME OF WEALTHY GERMANS. HE TOOK TWO BROKEN DOWN CASTLES AND MADE THE WORLD'S MOST LOVED CASTLE.. NEW SWAN LAKE.. WORLD CLASS WITH ALL THE LATEST THINGS INCLUDING CENTRAL HEATING.

MOST GERMAN OR FINNISH CITIZENS DO NOT WANT THE BUNDESBANK OR ECB TO BUY GREEK BONDS BECAUSE THEY KNOW THAT THAT WILL HAVE TO PICK UP THE BILL IN THE END... MERKEL IS LIVING IN DREAM LAND AND THEY CALLED LUDWIG MAD. HE PAID FOR THE CASTLE FROM HIS ON POCKET.. MERKEL HAS NOT PAID A EURO OUT OF HERS.

Just a thought,
Bi Metal Au Pt.. know as GoldStandard on the old Fed-Watch board.

[bimetalaupt]

Now Jamie Dimon is complaining that the extra cost of capital is making the USA banks not as completive as England.. Remember when HSBC wanted to move to New York...

JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon said the U.S. should consider withdrawing from the Basel group of global regulators and that new international capital rules are “anti-American,” according to the Financial Times.

“I’m very close to thinking the United States shouldn’t be in Basel anymore,” Dimon said in an interview, the newspaper reported today. “I would not have agreed to rules that are blatantly anti-American.”

Dimon, 55, who leads the most profitable U.S. lender, has criticized regulators for new global capital requirements under Basel III and U.S. rules being formulated under the Dodd-Frank Act. In June, Dimon took an unusual step in pressing Bernanke in a public forum on whether regulators have overreached in reining in the banking system and are slowing economic growth.

Dimon said that moves by the 27 member-states of the Basel Committee on Banking Supervision to impose an additional charge on the largest banks go too far, according to the FT. He also criticised global liquidity rules as unfair, saying that regulations view European covered bonds as highly liquid while they discount U.S.-backed mortgage securities.

“Our regulators should go there and say, ‘If it’s not in the interests of the United States, we’re not doing it,” Dimon said, according to the newspaper.

Joseph Evangelisti, a spokesman for New York-based JPMorgan, declined to comment.

YOU GOT TO LOVE THE SHORT GUY IN THE HAND MADE SUIT.. IT IS MIGHTY BANKER...AKA BEN B.!!! YES HE IS THE PRESIDENT OF THE LARGEST AND MOST PROFITABLE BANK IN THE WORLD.. THE ONE THAT SAVED THE EU AND THEIR BANKING SYSTEM IN 2008 AND MADE A KILLING DOING IT.
JUST A THOUGHT,
Bi metal Au Pt... Formally know as GoldStandard

[bimetalaupt]

Service may cut the ratings of BNP Paribas SA, Societe Generale SA and Credit Agricole


U.S. stock futures tumbled, indicating the Standard & Poor’s 500 Index will extend last week’s decline, as speculation Germany is preparing for a Greek default spurred turmoil in global financial markets.

Morgan Stanley, Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM) slumped at least 1.3 percent, following losses in European banks, and as Citigroup Inc. slashed its third-quarter profit estimates for the U.S. lenders. Caterpillar Inc. and Alcoa Inc. (AA), which are among companies most-dependent on economic growth, decreased more than 2.1 percent.

S&P 500 futures expiring in December lost 1.5 percent to 1,135.60 at 9:11 a.m. in New York. The benchmark measure of U.S. equities slumped 1.7 percent last week, wiping out its rally since Sept. 2 on the final day amid concern Europe’s crisis is worsening. Dow Jones Industrial Average futures retreated 150 points, or 1.4 percent, to 10,799 today.

“There’s so much anxiety among investors,” Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co., said in a telephone interview. “There’s troubling news out of Europe. People are concerned that if Greece defaults, there could be a ripple effect. It’s fear of the unknown. There’s an abundance of bad news overseas. And in the U.S., the economic news has not really been enough to boost confidence.”

Between April 29 and Aug. 8, the S&P 500 fell 18 percent on concern that Europe’s debt crisis will spread and after S&P downgraded the U.S. government’s credit rating. The measure has risen 3.1 percent since then. It closed as low as 1,119.46 on Aug. 8, within 29 points of a bear market, or a 20 percent drop.
‘Fragile’

Europe’s recovery is “fragile” and sovereign-debt levels will keep rising through 2012 in the aftermath of the recession, the European Commission said today. Moody’s Investors Service may cut the ratings of BNP Paribas SA, Societe Generale SA and Credit Agricole SA this week because of their Greek holdings, two people with knowledge of the matter said. Officials in Chancellor Angela Merkel’s government are debating how to shore up German banks should Greece fail to meet budget-cutting terms of its aid package, three coalition officials said Sept. 9.

Greek Prime Minister George Papandreou, vowing to avoid a default and stay in the euro, approved new measures yesterday to help plug a budget gap as resistance builds in Europe to extending more aid to the region’s most-indebted nation.

U.S. stock futures tumbled, indicating the Standard & Poor’s 500 Index will extend last week’s decline, as speculation Germany is preparing for a Greek default spurred turmoil in global financial markets.

Morgan Stanley, Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM) slumped at least 1.3 percent, following losses in European banks, and as Citigroup Inc. slashed its third-quarter profit estimates for the U.S. lenders. Caterpillar Inc. and Alcoa Inc. (AA), which are among companies most-dependent on economic growth, decreased more than 2.1 percent.

S&P 500 futures expiring in December lost 1.5 percent to 1,135.60 at 9:11 a.m. in New York. The benchmark measure of U.S. equities slumped 1.7 percent last week, wiping out its rally since Sept. 2 on the final day amid concern Europe’s crisis is worsening. Dow Jones Industrial Average futures retreated 150 points, or 1.4 percent, to 10,799 today.

“There’s so much anxiety among investors,” Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co., said in a telephone interview. “There’s troubling news out of Europe. People are concerned that if Greece defaults, there could be a ripple effect. It’s fear of the unknown. There’s an abundance of bad news overseas. And in the U.S., the economic news has not really been enough to boost confidence.”

Between April 29 and Aug. 8, the S&P 500 fell 18 percent on concern that Europe’s debt crisis will spread and after S&P downgraded the U.S. government’s credit rating. The measure has risen 3.1 percent since then. It closed as low as 1,119.46 on Aug. 8, within 29 points of a bear market, or a 20 percent drop.
‘Fragile’

Europe’s recovery is “fragile” and sovereign-debt levels will keep rising through 2012 in the aftermath of the recession, the European Commission said today. Moody’s Investors Service may cut the ratings of BNP Paribas SA, Societe Generale SA and Credit Agricole SA this week because of their Greek holdings, two people with knowledge of the matter said. Officials in Chancellor Angela Merkel’s government are debating how to shore up German banks should Greece fail to meet budget-cutting terms of its aid package, three coalition officials said Sept. 9.

Greek Prime Minister George Papandreou, vowing to avoid a default and stay in the euro, approved new measures yesterday to help plug a budget gap as resistance builds in Europe to extending more aid to the region’s most-indebted nation.

[bimetalaupt]

ONE MORE LONG COPY.. SORRY ABOUT THAT!! BANKS ARE FALLING IN EUROPE BECAUSE THE RECOVERY IS FRAGILE AT BEST.. DEPRESSION IN THE PIIGS!! TEXAS IS GOING BETTER THEN THE #1 ECONOMY IN THE EU: GERMANY!! EUROPEAN SAVING RATES ARE LESS THEN CHINA AND NOW THE USA HAS INCREASED SAVINGS BY SOME 1000% FROM THE 2006 CHART!!
European stocks slumped for a second day, dragging the benchmark regional gauge to its lowest level since July 2009, as speculation mounted that Germany is preparing for Greece to default.

BNP Paribas (BNP) SA, Societe Generale SA and Credit Agricole SA (ACA) slid more than 8 percent after two people with knowledge of the matter said Moody’s Investors Service may cut the banks’ ratings because of their Greek holdings. AXA SA (CS) and ING Groep NV (INGA) lost more than 8 percent as insurers posted the biggest losses among 19 industry groups on the Stoxx Europe 600 Index.

The Stoxx 600 lost 2.7 percent to 218.48 at 2:36 p.m. in London. The gauge extended last week’s 3.7 percent slide, bringing its slump from this year’s peak on Feb. 17 to 25 percent, as economic data from the U.S. and Europe trailed forecasts and Standard & Poor’s downgraded America’s AAA sovereign-debt rating.

“Major equity markets remain laced with fear and uncertainty over the lack of any resolution to the ongoing crisis,” said James Hughes, a senior market analyst at Alpari Ltd. in London.

The Stoxx 600’s slump has dragged the price-earnings ratio on the gauge to 9.1 times the estimated profits of its constituent companies, the lowest valuation since March 2009, according to data compiled by Bloomberg.

National benchmark indexes declined in all 18 western European markets. The U.K.’s FTSE 100 Index slid 2.2 percent, Germany’s DAX lost 3.1 percent and France’s CAC 40 Index declined 4.3 percent. The MSCI World (MXWO) Index extended its drop since this year’s high to 20 percent.
Germany Debates Crisis

Officials in Chancellor Angela Merkel’s government in Germany are debating how to shore up the country’s banks should Greece fail to meet the budget-cutting terms of its aid package, three coalition officials said on Sept. 9. BNP Paribas, Societe Generale and Credit Agricole may have their ratings cut by Moody’s this week because of their holdings of the Mediterranean nation’s debt, two people with knowledge of the matter said.

Prime Minister George Papandreou, vowing to avoid a default and keep Greece in the euro, approved new measures yesterday to help plug a budget gap as resistance builds at home and in Europe to extending more aid to the European Union’s most- indebted nation.

“Capital preservation is the main consideration right now,” said Fredrik Nerbrand, the head of global asset allocation at HSBC Holdings Plc in London, in a Bloomberg Television interview with Owen Thomas. “This is still an environment that is highly uncertain. Owning risk is not really top of my agenda.”
SocGen, BNP Paribas

Societe Generale (GLE) slid 8.4 percent to 15.98 euros. BNP Paribas tumbled 12 percent to 26.24 euros and Credit Agricole plunged 8.3 percent to 4.97 euros. All three lenders have tumbled at least 49 percent in the last three months.

French banks top the list of Greek creditors with $56.7 billion in overall exposure to private and public debt, according to a June report by the Basel, Switzerland-based Bank for International Settlements. Moody’s placed the three banks’ ratings on review in June to examine “the potential for inconsistency between the impact of a possible Greek default or restructuring and current rating levels,” the rating company said at the time.
Bank Capitalization Plans

In the U.K., the Independent Commission on Banking recommended that lenders insulate their consumer and investment banking units. The plans to strengthen Britain’s consumer banks may cost as much as 7 billion pounds ($11 billion) to implement, the government-appointed commission said in a report today. The lenders will have until 2019 to implement the proposals, the report said.

Barclays Plc (BARC) slipped 0.7 percent to 143 pence. Royal Bank of Scotland Group Plc (RBS) dropped 1.5 percent to 21.2 pence, paring an earlier loss of as much as 7.5 percent.

“It seems that the ideas bought up in the report have been touted around for so long that they are no longer news,” said Alpari’s Hughes. “We all knew about the ring fencing of the banking divisions, so the whole thing has not surprised us in the slightest.”

A gauge of insurers posted the biggest loss among the 19 industry groups in the Stoxx 600, retreating 4.2 percent. AXA slumped 8.4 percent to 8.61 euros and ING lost 8.6 percent to 4.49 euros.

Charter International Plc (CHTR) rallied 7.1 percent to 861 pence after Colfax Corp. (CFX)’s U.K. unit said the company agreed to buy the U.K. engineering business for about 1.53 billion pounds.

Attachments:

[bimetalaupt]

AGAIN : BEN B. AND COMPANY ARE SUPPLYING HUGE AMOUNT OF CURRENCY ( ie $$$) TO THE LINGERED FRENCH BANKING SYSTEM!!! OK BEN YOU SAVE EUROPE BUT NOT MAIN STREET , BATTLEFIELD ,PA OR THE STATE OF CONFUSION IN THE USA...HOW DARE YOU.. YOU SAID THE LAST THREE DEPRESSIONS STARTED WITH EUROPEAN BANK FAILURES...POSTED ALL ABOUT THE DEPRESSIONS IN EUROPE.. THEY GET HAMMERED EVERY 50 YEARS OR SO..J.P.MORGAN WANTS OUT OF THE BIS III.. IT IS ANTI AMERICAN BUT WE WILL HAVE THE STRONGER BANKS.. RUN TO SAFTY CALLS FROM THE LUX GROUP AS POSTED BEFORE CALL FOR GOLD TO $2,500 AS A SAFETY NET TO THE CRASHING BLACK SWAN.. DECOY409 AND LUX COULD BE CORRECT!!!!

By Keith Jenkins and Emma Charlton - Sep 12, 2011 7:33 AM CDT
Bunds climbed, driving two- and 10- year yields down to records on speculation German Chancellor Angela Merkel is preparing for a Greek default.
www.bloomberg.com/news/2011-09-12/german-government-bond-yields-slide-to-records-amid-greek-default-concern.html
Greece’s two-year note yields surged above 60 percent even as Prime Minister George Papandreou approved new measures to help plug the budget deficit. Italian bonds fell as demand declined and yields rose at a bill auction today. The cost of insuring against default on European sovereign debt rose to an all-time high, according to credit-default swaps. Dutch, Finnish and Austrian 10-year yields dropped to the least since the euro was introduced in 1999.

“Despite Greece announcing extra measures, the overriding discussion in the market is about a potential default and possible exit from the euro,” said Marius Daheim, a senior fixed-income strategist at Bayerische Landesbank in Munich. “This is pushing investors more into safe-haven territory.” YES THEY AGREE WITH ME AT LUX.. USA IS #1 AND AAA+ RATED BY MMXII WITH A MATH FACTOR OF 1.04273076923077 (AAA+) AND CONFIDENCE RATING OF 99.00932133204962326545% ( SHAMELESS SELF PROMOTION OF LENDATA,USA BY THE PRESIDENT OF SAID FIRM)

German 10-year bund yields slid five basis points to 1.72 percent at 1:22 p.m. in London, after falling to a record 1.705 percent. The 2.25 percent security due in September 2021 advanced 0.485, or 4.85 euros per 1,000-euro ($1,363) face amount, to 104.820. Two-year yields were little changed at 0.39 percent after falling to 0.359 percent, the lowest since the euro’s introduction.

The Stoxx Europe 600 Index slumped 3.3 percent and futures on the Standard & Poor’s 500 Index dropped 2.1 percent. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments jumped 17 basis points to 352 basis points. The euro weakened to its lowest level since 2001 against the yen and slid versus the dollar.
Greek Yields

Investors have to pay $5.65 million upfront and $100,000 annually to insure $10 million of Greek debt for five years, up from $5.5 million in advance on Sept. 9, CMA prices show.

Greek two-year note yields jumped more than seven percentage points to a euro-era record 64.32 percent. They climbed 9.8 percentage points last week. Ten-year bond yields advanced 188 basis points to an all-time high 22.44 percent, pushing the yield difference, or spread, versus similar-maturity German bund to 2,071 basis points, or 20.71 percentage points. I DO NOT DO JUNK.. ONE LEVEL ABOVE DEFAULT BY FITCH...

The decisions taken by European leaders in July “won’t suffice” to save Greece from default, Lars Feld, a German government adviser, said in an interview today with Bloomberg Television. Feld said he sees a restructuring of Greek debt by spring or summer of 2012.
New Measures

A new set of measures will help Greece meet deficit targets of 17.1 billion euros in 2011 and 14.9 billion euros in 2012, covering a 2 billion-euro shortfall for this year that has been exacerbated by a deepening recession, according to Finance Minister Evangelos Venizelos.

French 10-year bond yields dropped to a record low 2.444 percent, before settling at 2.48 percent, little changed from last week. Similar-maturity Dutch rates fell as low as 2.168 percent, while Austrian yields dropped to 2.489 percent. Finnish 10-year yields also declined to a euro-era low of 2.203 percent.

Renewed fears European policy makers are failing to prevent a Greek default have prompted investors to sell stocks and send the euro to an almost seven-month low versus the dollar. Group of Seven finance chiefs said they would support banks and buoy slowing growth, during weekend talks in Marseille, France.
Currency Swaps

The premium European banks pay to borrow in dollars for 12 months through the swaps markets increased to the most since December 2008, a sign lenders may be struggling to get funding.AGAIN ECB AND BUNDISBANK HAVE ADDED TO THEIR SWAP ACCOUNT TODAY ( MONDAY) PER LUX GROUP!!!

The cost of converting euro-based payments into dollars, as measured by the 12-month cross-currency basis swap, fell to as low as 78.75 basis points below the euro interbank offered rate, or Euribor, indicating a higher premium to buy the greenback, according to Bloomberg data. Basis swaps allow banks to borrow in one currency, while simultaneously lending in another.

German, Dutch and Finnish bonds jumped last week and Greek, Spanish and Italian bonds fell, amid concern Europe’s debt crisis is intensifying as growth slows. The euro is under “existential threat,” Nobel laureate economist Paul Krugman wrote in the New York Times today.

Italian bonds fell, even as the European Central Bank was said to buy the nation’s securities. The yield on the 10-year bond rose 13 basis points to 5.54 percent. The nation’s two-year yields jumped 26 basis points to 4.40 percent. Spain’s 10-year yields advanced 14 basis points to 5.30 percent, and two-year yields climbed 15 basis points to 3.74 percent.
Supply ‘Test’ OR STRESS TEST OF THE BANKS WAS THE BIGGEST JOKE IN THE HISTORY OF THIS DEPRESSION OR GREAT RECESSION.. AS YOU WISH MERKEL..
THING ARE GETTING REAL BAD REAL FAST..I CAN NOT WAITE TO SEE WHAT FTI HAS TO SAY!! OR DECOY409!!

BI METAL AU PT.. BEFORE KNOW AS GOLDSTANDARD

ASKING THE QUESTION: WHY DID WE EVER LEAVE THE GOLDSTANDARD.. THANK YOU PRESIDENT NIXON!!

PS: I REPOSTED DR. BARRO TABLE OF DEPRESSIONS AND HOW DEEP THEN WENT AND HOW LONG AND WHEN AND WHERE.. GERMANY HAS A HISTORY OF DEPRESSIONS.. BET THAT WILL EFFECT THE NEXT ELECTIONS MRS MERKEL FROM EAST GERMANY.. NEED TO START SAVINGS SOME REAL MONEY FOLKS..THINGS ARE GETTING REAL BAD AND IT WILL KILL US HERE.. ASK FTI!!!

[bimetalaupt]

One more Black Swan sighting..
... Europeanising Credit default swap cost up through the ceiling
Sovereign, Bank Default Swap Indexes Rise to Records in Europe
bloomberg

Abigail Moses, On Monday September 12, 2011, 10:35 am EDT

The cost of insuring European sovereign and bank debt rose to records on speculation Germany is preparing for a default by Greece while French lenders may be downgraded because of their holdings of the country’s bonds.

The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 governments soared 15 basis points to 351 at 3:30 p.m. in London. The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers increased 17 basis points to 317 and the subordinated index jumped 25 to 560, according to JPMorgan Chase & Co.

Chancellor Angela Merkel’s government is debating how to support German banks should Greece fail to meet budget-cutting terms of its rescue package, three coalition officials said Sept. 9. Swaps on BNP Paribas SA, Societe Generale SA and Credit Agricole SA, France’s largest banks, surged to all-time highs on bets they’ll have their ratings cut by Moody’s Investors Service this week.

“The situation in Greece is just the initial problem,” said Alberto Gallo, a strategist at Royal Bank of Scotland Group Plc in London. “Our economists expect a hard default is likely by year-end. We are focused on the consequences of that for European banks.”

Sovereign Records

Credit-default swaps on Portugal, Greece, Italy and France surged to records, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market. Portugal jumped 103 basis points to 1,237, Italy rose 38 basis points to 503 and France was up 12 at 190.

It now costs $5.65 million upfront and $100,000 annually to insure $10 million of Greek debt for five years, up from $5.5 million in advance Sept. 9.

Swaps on Societe Generale were 58 basis points higher at 448, Credit Agricole increased 47 to 337 and BNP Paribas rose 36 basis points to 311, all records, according to CMA.

Moody’s placed the three banks’ ratings on review in June to examine “the potential for inconsistency between the impact of a possible Greek default or restructuring and current rating levels,” the rating company said at the time. Downgrades are likely as the review period concludes, said the people with knowledge of the matter, who declined to be identified because the information is confidential.

“It would not be a surprise if Moody’s downgraded Italy and a couple of French banks” this week, Gary Jenkins, head of fixed income at Evolution Securities Ltd. in London, wrote in a note to investors.

Bonds Fall

SocGen’s 1.25 billion euros of 4 percent, April 2016 senior unsecured bonds declined 0.3 cent to 98.28 cents on the euro, Bloomberg Bond Trader prices show. The Paris-based lender’s 1 billion euros of 4.196 percent subordinated perpetual notes dropped 0.7 cent to 55.8 cents on the euro.

BNP’s 2 billion euros of 3.75 percent, senior unsecured bonds due in November 2020 fell 0.7 cents to 99.91 cents on the euro, after climbing to a closing-day record of 100.56 cents on Sept. 9, according to Bloomberg Bond Trader prices. The bank’s 375 million euros of 5.2 percent subordinated securities due September 2017 declined 0.44 cents to 100.58.

Swaps on U.K. banks rose to records as plans to strengthen consumer lenders may cost as much as 7 billion pounds ($11 billion) to implement, a government-appointed commission said. Contracts on Barclays Plc’s senior debt climbed 31 basis points to 291, while swaps on Royal Bank of Scotland Group Plc notes increased 31 basis points to 399, CMA prices show.

[usaone]

Bruce. Orderly default in Greece....if there is such a thing......

China and Ben FLOOD the rest of the eurozone with liquidity.

[bimetalaupt]

Yes, Like the old line.. Everything is fine.. until the banks closes.. Like Knickerbockers bank.. a fancy line of lies , a truly fancy bank building will not cover loses in the Copper market!! BTI
online.wsj.com/article/SB10001424053111904265504576568693911614726.html?mod=googlenews_wsj

BERLIN–German Chancellor Angela Merkel sought to quash talk that cash-strapped Greece might have to declare bankruptcy soon or even leave the euro zone, rebuking her junior coalition partner for fuelling market speculation about Greece's fate.
...
"I think we will do Greece the biggest favor by not speculating much, but instead encouraging Greece to implement the commitments it has made," Ms. Merkel told RBB Inforadio, a public broadcaster in the Berlin region. "What we don't need is unrest in the financial markets – the uncertainties are already big enough," she said.

Conflicting statements this week by German politicians about Greece have added to markets' fear that Greece will default on its debt and might be forced out of the euro. Tensions between Greece and the team of international inspectors charged with overseeing its fiscal overhauls have also hit investors' confidence that Europe can tame the festering debt crisis in parts of the single-currency zone.

Like the bank's famous lies about their capital structure, most German banks are insolvent if you mark to market Greek bonds etc.. it is the Butterfly syndrome.. The spots on the wings look like the eyes of an Owl. Act Mean but be sweet and harmless.

Just a thought,
Bi Metal Au Pt

[bimetalaupt]

Sept 12, 2011 22:49:40 GMT -5 usaone said:

Bruce. Orderly default in Greece....if there is such a thing......

China and Ben FLOOD the rest of the eurozone with liquidity.

USA WON,
YES, "WHAT WE DO NOT NEED IS UNREST IN THE FINANCIAL MARKETS".. HOW MUCH MORE CIAOS CAN WE INVESTORS TAKE, MRS MERKEL??? WE HAVE CIAOS. IT IS LIKE MANY CASINOS NOT BANKS OUT THERE.

BANKERS ARE NOT LENDING!! AFTER TRILLIONS OF DOLLARS FROM THE FED AND ECB. I AM STARTING TO THINK LIKE PRESIDENT OF THE DALLAS FRB.. WILL ONE MORE TRILLION DOLLARS OF QE3 MAKE A LOT OF DIFFERENCE.. IT WILL TAKE A LOT OF TIME AND A LOT OF CAPITAL IN THE BANKS.. BOA ALONE WILL NEED 75 BILLION!!

the all capital means I am shouting!! in Geek.

Sorry for the offence to the eyes,
Bi Metal Au Pt

I know.. the world is look at the short man in the middle to save all the PIIGS, Again!!
K4U...

[bimetalaupt]

Benjamin Strong, Jr. (December 22, 1872 – October 16, 1928) was an American banker. He served as Governor of the Federal Reserve Bank of New York for 14 years until his death. Strong exerted great influence over the policy and actions of the entire Federal Reserve System.[1]
His policy of maintaining price levels during the 1920s through open market operations, or purchases and sales of government securities, and his willingness to maintain the liquidity of banks during panics, have been praised by monetarists and harshly criticized by Austrian economists[2]

Strong was also involved in the establishment of the Federal Reserve System. After the Panic of 1907, leading bankers believed a private central bank should be created to issue money. The public was adamantly opposed to the establishment of a central bank. Strong, who was Vice President of Banker’s Trust of New York, was JP Morgan's emissary to the secret Jekyll Island (Georgia) expedition in 1910—one of the selected members who stayed at the luxurious Jekyll Island Hunt Club retreat in November for a private ten-day conference. Also in attendance were Paul Warburg, a recent immigrant from a prominent German banking family who was a partner in the New York banking house of Kuhn, Loeb & Co.; Senator Nelson Aldrich (Nelson Rockefeller was named after Aldrich, his maternal grandfather); A. Piatt Andrew, Assistant Secretary of the Treasury and Special Assistant to the National Monetary Commission (the only other NMC member besides Aldrich); and other bankers including Frank A. Vanderlip, president of the National City Bank of New York; Henry P. Davison, senior partner of J.P. Morgan & Co.; and Charles D. Norton, president of the Morgan-dominated First National Bank of New York.

What came to be known as the Aldrich Plan was drafted by these men during their conference at Jekyll Island. The plan was written in secrecy, as the public would never approve of a banking reform bill written by bankers; much less of a plan for a central bank. The Aldrich Plan was introduced in the U.S. Congress, and followed by much debate, but never came to a vote, because the party in favor of it was voted out, and the Glass-Owens Bill was introduced instead.

The general outline of the Aldrich Plan did eventually serve as the model upon which the Federal Reserve System was created with, however, significant changes that placed control into political hands (via the Board of Governors, selected by the President of the United States), and limited the role of professional bankers in its operation to that of the 12 branches. It met with Warburg's satisfaction, as he said that minor changes could be adjusted administratively later. The term Central Bank purposely was kept out of its name, as Warburg and others warned it would not be passed otherwise.

Three years later, after months of hearings, drafts, and debates, a bill creating the Federal Reserve System was approved by Congress as the Federal Reserve Act and signed into law by President Wilson on December 23, 1913. The Federal Reserve System has many similarities to the National Reserve Association proposed by the Aldrich Plan, but with vastly differing management and control.

Strong became President of Banker’s Trust in 1914, and shortly thereafter was appointed Governor of the Federal Reserve Bank of New York the same year, which position he maintained until his death in 1928.

Economic historian Charles P. Kindleberger states that Strong was one of the few American policymakers interested in the troubled financial affairs of Europe in the 1920s, and that had he not died in 1928, just a year before the Great Depression, he might have been able to maintain stability in the international financial system.[3]
OF THE FEW MEN IN FINANCE THAT MADE A REAL DIFFERENCE.. NEW YORK FEDERAL RESERVE BANK HAS HAD MORE THEN THEIR SHARE.. HE WAS THE BEST!!!

JUST A THOUGHT,
Bruce aka Goldstandard from Fed-Watch

Attachments:

[Aman A.K.A. Ahamburger]

The biggest problem with analyse this rescission like other depressions except 1873 is because of the fact that there was NO VOLUME coming online. Just watched some Wan Jabo speech, drung the world economic fourm. China can't afford a sever depression, and they have the money to spend!! That is the message Happiness not GDP,, ya know, Free enterprise. WE win!

Europe needs 1 trillion long term; China has two right now. Just like the building of the next biggest economies in 1876(USA) we are seeing the next biggest economies (China,India,ect) I think the depression of 2130 is going to be a TERRIBLE one.. Black swans are un-known.. You sure know a lot about the lack of money. One thing we know about the euros is they love DRAMA!!

[Aman A.K.A. Ahamburger]

A wise man sent me this Sunday night, great call!

_____________________________________________
(Reuters) - A widening of the euro zone debt crisis beyond a Greek government default would pose an incalculable risk for Germany's banks, a top German regulator said in an interview.

"A Greek government default cannot be seen in isolation," Raimund Roeseler, head of banking supervision at German financial watchdog Bafin, told Reuters.

Germany's banks are robust and better capitalized than they were two years ago but the potential for a chain reaction following a Greek government default would take the sector into unknown territory, Roesler said.

"We are worried particularly about the possible knock-on effect, which we cannot reliably calculate. Every figure you can name is just a guess," he said.

German banks have less than 10 billion euros ($14 billion) of exposure to Greek government bondsin total, with Deutsche Bank at around 1.2 billion euros and Commerzbank at 2.2 billion.

But a Greek default could hurt banks in other countries and potentially drag down German lenders in their wake, a prospect that keeps Bafin on high alert.

"We take a reading of the liquidity situation of all important banks every day. We've tightened our surveillance and are in intensive talks with banks about their exposures and also the way they view the money market situation," Roeseler said.

German lenders are less vulnerable than their counterparts in Franceand Italy, banking observers say.

"German banks are in a comfortable situation because no one in the market doubts the German AAA-rating," Roeseler said.

Refinancing is also no problem for German lenders, despite a broad-based pullback from Europe by U.S. money market funds.

"Some U.S. investors got out of Europe without taking into consideration the different situations in individual countries, but we've seen that German banks have been able to sufficiently cover their dollar refinancing needs," he said.

Roeseler said he saw no near-term panacea to calm financial market jitters.

"In the medium term, we've got to slow the marketsdown. I'm particularly concerned that the derivatives markets have decoupled themselves from the real economy," Roeseler said.

CLOSE SCRUTINY

In the run-up to the implementation of tighter risk-capital rules for banks, known as Basel III, Bafin is taking an ever-closer look at the systems banks have in place to assess risk.

"We are using powers to influence business models that we did not have before the crisis," Roeseler said.

The European Union wants the Basel III rules to apply to all 8,400 banks in the bloc, a view that has angered small savings and cooperative banks, who decry the extra regulatoryburden.

"It is true that big banks are the focus of Basel but we need a level playing field," he said, adding that the needs of small banks would be taken into account when developing technical standards.

The new Basel rules have evoked opposition in U.S. banking circles, notably from JP Morgan's chief executive earlier this month.

Roeseler, who is one of Germany's representatives on the Basel Committee of banking regulators, said he expected the United States to apply the rules that it helped to negotiate.

Regulators are also working to develop a list of global banks that would disrupt the financial system should they fail. These big banks will face more stringent capital requirements.

"The price of systemic relevance is not just 1 to 2.5 percent more capital, but rather a much more intense supervision than now. We will be more closely man-marking these players," Roeseler said.

Regulators are still seeking rules for winding down big banks that do fail, but one point is certain: "All investors, including creditors, will be called upon ahead of taxpayers."

Contingent-capital or "CoCo" bonds would not meet international standards for hard equity capital and the market for these bonds was unlikely to develop significantly, he added.

Following the European bank stress tests in July this year, the European Banking Authority is discussing if and how to handle publishing the results of next year's exercise.

"The raft of detail in the latest published results did not exactly serve to calm markets," Roeseler said.

($1 = 0.722 Euros)
________________________________
I came across this today..

From the FT. More evidence of what some have been saying around here. It's fiscal or bust.

Eurobonds and fiscal union are the only way out
www.ft.com/intl/cms/s/0/9e3d5db2-dfca-11e0-b1db-00144feabdc0.html?ftcamp=rss#axzz1YSsg7Ene

The European Central Bank can do a lot more than it is doing to help resolve the crisis. In the past few weeks, the ECB has expanded its programme of sovereign bond purchases and helped to plug a dollar funding gap for eurozone banks. It will also need to cut interest rates.

Soon, the ECB will come under pressure to monetise debt. The ruling of Germany’s constitutional court and a shocking rise in anti-euro sentiment in the German government make it unlikely that the European Union will end the crisis by means of a eurobond and a fiscal union in the short run. That leaves the ECB as the last line of defence for the euro. Can this work?

On a purely technical level, it does not really matter whether you create a eurobond, or whether the ECB buys all the debt. The ECB’s liabilities are a hidden eurobond. Contrary to what various Germans in the ECB’s governing council may have been saying, we are not in this situation yet. The ECB’s securities markets programme runs to about €150bn, not really a macroeconomically relevant number.

One can argue that it helped stabilise the financial system, and thus the transmission mechanism of monetary policy. But once you raise this level to, say, €1,000bn, you will have crossed the line. By then, you are undertaking a fiscal operation.

The ECB would be ill advised to go that far without a political agreement on how the eurozone should work. In fact, an unconditional ECB bail-out could be dangerous, just as a eurobond would be if not accompanied by a fiscal union. You would resolve the short-term crisis, but the underlying imbalances would persist, and cause a further build-up of debt. It would delay a break-up of the eurozone, but would make it more probable in the long run.

So if neither eurobonds nor ECB bond purchases are going to solve the crisis, what are the alternatives? Willem Buiter and Ebrahim Rahbari of Citigroup have written an excellent analysis, going through the various scenarios, and dismissing most of them. They conclude the most likely outcome will be a fudge, well short of full fiscal union. This will see crises resolved by a combination of default and resolution regimes. It would contain a few elements of a fiscal union, such as a bank resolution regime, joint bank supervision, and sovereign default procedures, but it would be qualitatively different from anything we know.

I agree that this is very much the direction the EU will take. In Berlin, there is now a consensus among senior policymakers that Greece is very likely to default inside the eurozone, but not right away. By the time it happens, the European financial stability facility will be empowered to protect European banks directly. Those who advocate this approach clearly hope that the improved institutional set-up will be sufficient to deal with contagion.

The EU will go down this path because it is the easiest to get onto. I doubt, however, that it will get them anywhere – because the crisis has now spread to Italy. The EFSF and its successor, the European Stability Mechanism, have been set up to handle small countries. They are not big enough to handle large countries. Besides, Italy does not have a short-term funding gap, but a long-term solvency problem. With debt of 120 per cent of gross domestic product, a potential real economic growth rate of around 1 per cent, and a long-term interest rate of 5-6 per cent, Italy’s debt sustainability is in doubt. A monetary union, which solves crises through a combination of default and backstops for the financial sector, would hardly solve Italy’s problem.

The concept of a default union could work in a monetary union with a strong core and a weak periphery, but not in one where weakness has encroached into the core. The Buiter/Rahbari scenario could have worked if the European Council had set up the institutions necessary for crisis six months ago. A periphery that includes Italy and Spain is too big to save with the current limited liability process, and too big to default without causing an enormous financial crisis.

The spread of the crisis to Italy is why I believe a eurobond and a fiscal union are the only way out. Even a long-term process with the ultimate goal of a eurobond could be sufficient. But it must be credible. If it is, then the EFSF or even the ECB may buy as many bonds as it takes to stabilise market interest rates.

The chances that we are moving in that direction have recently diminished. The ruling of the German constitutional court has raised legislative hurdles, while political hostility is rising. We are moving away from what I consider the only effective solution to the crisis. This means, by extension, that we are moving closer towards an involuntary break-up.

[Aman A.K.A. Ahamburger]

Lots and lots of problems in Europe! No money there!

Bank of China Halts FX Trades With European Banks
ca.reuters.com/article/businessNews/idCATRE78J0S620110920

BEIJING/HONG KONG (Reuters) - Bank of China, a big market-maker in China's onshore foreign exchange market, has stopped foreign exchange forwards and swaps trading with several European banks due to the unfolding debt crisis in Europe, three sources with direct knowledge of the matter told Reuters on Tuesday.

Another Chinese bank has also halted interest rate swaps trading with some European banks, a source at the bank said, indicating Chinese lenders have joined the growing ranks of institutions cutting exposure to the crisis-hit euro zone. This source requested that he nor his bank be identified because of the sensitivity of the matter.

While the sources said Bank of China had stopped trading the forwards and swaps with several European banks, they only identified French lenders Societe Generale (SOGN.PA: Quote), Credit Agricole (CAGR.PA: Quote) and BNP Paribas (BNPP.PA: Quote).

Bank of China's decision was made partly because of the downgrade of these entities by Moody's ratings agency, the sources said.

One of the sources said that the decision by Bank of China (601988.SS: Quote) (3988.HK: Quote) may apply across its branches, including the onshore foreign exchange market.

"Apart from spot trading, all swaps and forwards trading (with the European banks) have been stopped," a separate source who is familiar with the matter told Reuters.

The sources declined to be identified because they were not authorized to speak with the media. A public relations official with Bank of China declined to comment.

Bank of China has also stopped trading with UBS AG (UBSN.VX: Quote) after the Swiss giant declared unauthorized trading had caused a $2.3 billion loss, the sources said.

Contacted by Reuters after the story was published, spokespeople for Societe Generale, UBS, Credit Agricole and BNP Paribas declined to comment.

Siemens Shelters Up to $8 Billion at ECB
www.cnbc.com/id/44574478/Siemens_Shelters_Up_to_8_Billion_at_ECB

Siemens withdrew more than half-a-billion euros in cash deposits from a large French bank two weeks ago and transferred it to the European Central Bank, in a sign of how companies are seeking havens amid Europe’s sovereign debt crisis.

While a world of opportunity seems not to far away.

Barclays opens Islamic window in DIFC
www.zawya.com/story.cfm/sidZAWYA20110920032738/Barclays_opens_Islamic_window_in_DIFC

Barclays Bank announced that it has received approval to operate an Islamic Window in the Dubai International Financial Centre (DIFC), enabling it to base its global Islamic products team in the DIFC, and to offer Islamic financial products and services from there.
Well-established as a global leader in Islamic finance, Barclays has been active in promoting the Islamic banking sector for well over a decade.

This licence endorsement, granted by the Dubai Financial Services Authority (DFSA), positions the global bank to further expand, its already diverse offering, in the Sharia-compliant financial services space.

"We are extremely pleased to hold an Islamic window licence from the DFSA," said John Vitalo, Chief Executive Officer, Barclays Plc, MENA, "and we look forward to continuing to introduce innovative Shari'ah-compliant solutions from the DIFC".
"As a long-standing international pioneer in Islamic finance, we have always recognised the importance of this industry," Vitalo added. "Today, we are even more strongly positioned to meet the evolving needs of clients in this dynamic market - here in the UAE, throughout the Mena region, and across the world."
Abdulla Mohammed Al Awar, Chief Executive Officer of the DIFC Authority, emphasised the importance of the Barclays licence to the ongoing development and diversification of the emirate's onshore financial centre and the wider regional economy. He said: "During this period of renewed financial stability and expansion, and at a time when the Islamic finance sector continues to experience especially notable growth, we are confident that Barclays will continue to make a unique contribution to the industry by providing world-class Shari'ah-compliant solutions from the DIFC."

"Operating from a DIFC Islamic platform will greatly enhance our ability to meet the needs of our regional and international clients seeking Shari'ah-compliant products and services," added Dr Dominic Selwood, Head of Islamic products at Barclays. "Based on our global track record and unique local insights, we will continue to focus on providing best-in-class customised Islamic solutions."

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