Eurozone breakup shock larger than Lehman

nouriel roubini...

The Eurozone eventual breakup shock could be larger than the fall of Lehman in 2008

In my view, there's a significant probability, more than 50 per cent, that over the next 12 months there's going to be another recession in most advanced economies," "Whether you call it a double dip recession, a continuation of the first recession or a second recession doesn't matter, it's semantic.

In a situation where it becomes disorderly, with defaults by a number of countries and a resulting exit of a number of states from the eurozone and its eventual break-up, the shock that could occur ... could be as large, if not larger, than the fall of Lehman in 2008.

i've made a habit of listening to roubini...

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A card-carrying MOTU thinks Europe should follow the U.S. example

what a bunch of hooey...

Roger Altman: America’s blueprint for saving Europe’s banks

The financial crisis struck the US harder and more quickly than it did Europe. The complete freezing of credit markets required an immediate and overwhelming intervention – and the American fiscal and monetary authorities delivered it.

Between the Federal Reserve, Treasury and the Federal Deposit Insurance Corporation, approximately $13,000bn of credit support was arranged for financial institutions in late 2008 and 2009.

There was no alternative to this massive reaction, and it worked. US credit markets are now healthy, and the recapitalised banking system is stable. History will look favorably on the boldness of America’s response. [emphasis added]

so, who is this guy roger altman anyway...?

wikipedia...

Altman holds a B.A. from Georgetown University and an M.B.A. from the University of Chicago Booth School of Business.

He was a general partner of Lehman Brothers from 1974 to 1977. From 1977 to 1981 he served as the Assistant Secretary of the United States Department of the Treasury, during which time he helped oversee the then-troubled financial affairs of Chrysler. In 1981, he returned to Lehman Brothers, where he became the co-head of investment banking and served on the board of the company and the management committee. During the 1980s, he was a lecturer and adjunct professor at the Yale School of Management. In 1987, Altman joined the newly-formed Blackstone Group as vice-chairman, head of its mergers and acquisitions advisory business and a member of the investment committee.

Altman served as the Deputy Treasury Secretary, before resigning in 1994 following a record-keeping scandal. In 1996, instead of returning to Blackstone he co-founded Evercore Partners, a boutique advisory and private equity investment firm in New York City, and currently serves as firm's Chairman.

Altman has served as advisor to two presidential candidates: John Kerry in 2004, and Hillary Clinton in 2008.

Altman is founder and chairman of Evercore Partners, which advised on the GM deal. Evercore, after being paid $46 million by GM pre-bankruptcy, asked for a $17.9 million "success fee." A U.S. bankruptcy trustee termed the fees "staggering" and "inordinately large" and said it "clearly exceeds the bounds of reasonableness" given that "Evercore had no success at finding a purchaser or funder for the Debtors."

Altman is listed as a member of the Steering Committee of The Bilderberg Group, a controversial group of influential business and government leaders who meet annually behind closed doors under a media blackout to discuss world issues. In 2009, Altman was on the list of Bilderberg conference attendees in Greece. [emphases added]

yep... altman is the guy the financial times thinks we should all be listening to... i don't think so...

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The core driver of modern capitalist society is fraud... Someone has to go to jail...

from tyler durden at zero hedge...

The evident conclusion is that the core driver of modern capitalist society is fraud at its very core, and nothing short of a massive revolutionary overhaul of the political system, which is the number one defender of the status quo courtesy of very lucrative bribes and kickbacks originating from the same rotten Wall Street that day after day is uncovered to be nothing but a sham filled with toxic assets, used to collateralize an ever growing wall of liquidity (think you Bernanke).

dylan ratigan talks with eliot spitzer on msnbc about lehman brothers...

dylan ratigan...

This report comes just short of suggesting this is by no means an accident but instead one of the greatest crimes ever perpetrated by a group of people, and enabled by the US government.

eliot spitzer...

There is no doubt civil cases will be brought. We had a failure of CEO, the CFO, the accountants, and indeed the regulators, the Fed and the Treasury, that were inside these banks, and the question has to be asked: where were they.

ratigan and spitzer make a very clear case in very simple language that there has been a massive con perpetrated on the american people... intuitively,we knew this was happening and it's high time the truth comes out...

Visit msnbc.com for breaking news, world news, and news about the economy

mike whitney at the smirking chimp via alternet...

This story isn't going away. Someone has to go to jail. It's clear that Geithner acted as the "chief facilitator" of industrial scale securities flim-flam which led directly to the Great Crash of '08. He needs to be held accountable for his actions.

the united states has been bending to the greedy scams of its super-rich elites and their bankster buddies for a long, long time... let's get this party going and start seeing some rule of law and accountability...

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Yesterday was the anniversary of the Lehman Brothers collapse and we're still waiting for the issues to be dealt with

nouriel roubini's rge monitor details the amount of financial institution crap that, apparently, is still crying out to be dealt with, one full year after the lehman brothers collapse...

What's Still the Same?

• Too big to fail banks are now even bigger and leverage has increased across the board. With the incorporation of insolvent competitors and the forced re-intermediation of formerly off-balance sheet vehicles, the leverage ratio of global banks has jumped to around 40-50 in the U.S., Europe, and the UK in 2008, according to InvestorsInsight. In 2010, up to US$900 billion of remaining off-balance sheet vehicles will have to be consolidated.
• While systemic banks benefit from implicit and explicit government backstops, a resolution regime for all systemically large and complex institutions like Fannie and Freddie, for example--arguably one of the most important measures-- is stalling in Congress amid waning political support. Moreover, there is strong lobbying against the Consumer Protection Agency, whose fate is unclear. It is not decided yet who will be the systemic risk regulator: the Fed or the Systemic Risk Council.
• The lack of any disciplining mechanism represents an incentive for large players to engage in risky trading activities with value-at-risk (VaR) measures back at record levels in Q2 2009 for the top five banks, with US$1.04 billion at risk to be lost at any given trading day, according to press reports.
• The TARP Oversight Panel mentioned in its August 2009 report that toxic assets are still on banks' books. They are likely to be found in the Level 3 accounting category (mark-to-model) due to valuation difficulties. As of Q1 2009, the large banks have US$657 billion of Level 3 assets on their books.
• Commercial Real Estate (CRE) Risk: Fitch reports that "while CRE loans, excluding the more problematic construction and development portfolios, represent more than 125% of total equity for the 20 largest banks rated by Fitch, the risk is even higher for banks with less than $20 billion in assets, as average CRE exposure represents more than 200% of total equity for these institutions." Fitch also announces ratings review by September.
• Dependence on wholesale funding markets is likely to remain an issue. The financing shortfall from the lack of securitization left a funding hole of about US$2 trillion and the market is still damaged from an overhang in legacy assets.
  

sigh...

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More bullshit maneuvering by the Fed PLUS now EVERBODY wants access to the federal tit

good god almighty... can it get more obscene...? sadly, the answer probably is yes, absolutely, it is going to get a LOT more obscene...

In one of the biggest changes to Wall Street in decades, Goldman Sachs and Morgan Stanley, the last two independent investment banks, will become bank holding companies, the Federal Reserve said Sunday night.

The move fundamentally changes one of the mainstays of modern Wall Street. It heralds new regulations and supervisions of previously lightly regulated investment banks.

The move comes after the bankruptcy of Lehman Brothers and the near-collapses of Bear Stearns and Merrill Lynch.

Being a bank holding company would give Morgan and Goldman access to the discount window of the Federal Reserve. While they have had access to Fed lending facilities in recent months, regulators had planned to take away discount window access in January.

The regulation by the Federal Reserve brings a host of accounting rule changes that should benefit the two banks in the current environment.

the rules ain't workin' for ya...? no sweat... change them goddam, pesky rules...

as if that weren't enough to gag a maggot, ALL the piggies want a place at the trough...

Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it.

Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages.

At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees.

Nobody wants to be left out of Treasury’s proposal to buy up bad assets of financial institutions.

“The definition of Financial Institution should be as broad as possible,” the Financial Services Roundtable, which represents big financial services companies, wrote in an e-mail message to members on Sunday.

The group said a wide variety of institutions as varied as mortgage lenders and insurance companies should be able to take advantage of the bailout, and that these companies should be able to sell off any investments linked to mortgages.

The scope of the bailout grew over the weekend. As recently as Saturday morning, the Bush administration’s proposal called for Treasury to buy residential or commercial mortgages and related securities. By that evening, the proposal was broadened to give Treasury discretion to buy “any other financial instrument.”

call and write your senators... call and write your congressman... call or write your newspaper... scream bloody murder... this shit has got to stop... NOW...!!

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Fuck no, AIG... Go screw yourself... B of A can kiss my ass and Lehman can put it where the sun don't shine...

i'm on vacation visiting my son and his wife in montana and taking a well-deserved break from the non-stop ugliness of national and world events, but i simply can't let these pass without comment...

first of all, not only no to aig, but FUCK, NO...!

A.I.G. Seeks $40 Billion in Fed Aid to Survive

The American International Group is seeking a bridge loan from the Federal Reserve as it faces a potential downgrade from credit ratings agencies.

and, as far as these three criminal enterprises, i hope b of a chokes on merrill and lehman deserves to die...

Offer for Merrill Accepted; Lehman Nears Liquidation

In one of the most dramatic days in Wall Street history, Merrill Lynch agreed to sell itself to Bank of America for about $50 billion, while Lehman Brothers headed toward bankruptcy.

p.s. for aig, lehman and merrill: boo-fucking-hoo..

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Guess who just HAS to comment on Chávez' defeat? Why Lehman Bros. and Goldman Sachs, of course!

in an article on the defeat of venezuela's constitutional referendum, guess who has to have their say...? why, none other than reps of two of the world's super-rich, monied elites, that's who...

"Apart from shelving a package of undesirable reforms indefinitely, the defeat should revitalize the opposition," Gianfranco Bertozzi of Lehman Brothers said.

and...

"President Chavez lost an important battle but hardly the war," Alberto Ramos of Goldman Sachs warned investors in a research note from New York.

hmmmmmm... i wonder why THEY would be so concerned...? (ya, right...!)

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