QUESTION: WHAT GREW FASTER THAN THE FEDERAL DEFICIT IN 2009

MULTIPLE CHOICES:

A: Brad Pitts beard

B: Sarah Palin's ego

C: Obama's negative poll results

D: Tiger's fairway wood

E: Lloyd Blankfein's annual bonus
 
 Hint:  Goldman Sachs, the world’s richest investment bank, could be about to pay its chief executive a bumper bonus of up to $100 million in defiance of moves by President Obama to take action against such payouts.

One bankster in Davos for the World Economic Forum (WEF) told The Times yesterday  “This is Lloyd flipping the bird at Obama.”

Q: What grew faster than Lloyd Blankfein's bonus in 2009?

A: Public distrust of Wall Street bankers.

Q: What do Tiger Woods, the Taliban and Lloyd Blankfein have in common?

A: $100 million of income per annum (ball swinger,  opium ball sellers and swinging dickhead).

BANZAI7 DERIVATIVES LAB: CASE STUDY--BANKER BONUSES

BANZAI7 INSTITUTE--Investment bankers in the U.S. have begun using equity derivatives to convert restricted shares paid as bonuses into cash, side-stepping new guidelines on remuneration which were designed to prevent bankers cashing out for at least three years, according to a headhunter.

The bankers are using over-the-counter equity derivatives strategies such as call options, put options and collars to "monetise" (a Wall Street euphemism for innovative swindling) their shares now, albeit at a discount to what they would receive if they waited for the restrictions to lift.

The revelation comes as global regulators seek to put an end to large cash bonuses in favour of deferred awards which tie bankers' compensation to long-term performance.

The senior managing director of U.S. business services firm Secretive Solutions, said some top earners at investment banks have negotiated to receive the shares component of their bonuses in restricted stock that is already vested or soon to vest. The stock is still subject to restrictions, for example on when it can be sold in the open market. However, because it is vested, they are able to turn it into cash by trading derivatives.

"Rather than wait three or five years for the restrictions to pass, bankers would rather take a discount of up to 50% now just to get out and do something else."

WB7: Bankers would rather take a discount of 50% now just to get out and do something else? What does this say for the state of our financial system? Cheap employee loans, derivative cash out strategies, here you have a unique opportunity to learn the meaning of regulatory arbitrage (a Wall Street euphemism for skirting the law). They can't help it, its in their nature.

The issue is not cash versus contingent compensation. They real issue is why do we continue to encourage the huge misallocation of human capital caused by oversized compensation packages for financial three card monte artists.

ENGINEERING HORSE'S ASSES

Here is a bit of interesting engineering trivia forwarded to the BANZAI7 Institute of Engineering and Financial Innovation.

US standard railroad gauge (distance between the rails) is 4 feet, 8.5 inches. That's an exceedingly odd number.

Why was that gauge used? Well, because that's the way they built them in  England , and English engineers designed the  first US  railroads.

Why did the English build them like that? Because the first rail lines were built by the same people who built the wagon tramways, and that's the gauge they used.

So, why did 'they' use that gauge then? Because the people who built the tramways used the same jigs and tools that they  had used for building wagons, which used that same wheel spacing.

Why did the wagons have that particular odd wheel spacing? Well, if they tried to use any other spacing, the wagon wheels would break more often on some of the old, long distance roads in  England.  You see, that's the spacing of the wheel ruts.......

So who built those old rutted roads? Imperial  Rome built the first long distance roads in Europe (including England ) for their legions. Those roads have been used ever since.

And the ruts in the roads? Roman war chariots formed the initial ruts, which everyone else had to match or run the risk of destroying their wagon wheels.. Since the chariots were made for Imperial  Rome, they were all alike in the matter of wheel spacing. Therefore the  United States  standard railroad gauge of 4 feet, 8.5 inches is derived from the original specifications for an Imperial Roman war chariot. Bureaucracies live forever.

So the next time you are handed a specification/procedure/process and wonder 'What horse's ass came up with this?', you may be exactly right. Imperial Roman army chariots were made just wide enough to accommodate the rear ends of two war horses. (Two horses' asses.)

When you see a Space Shuttle sitting on its launch pad, there are two big booster rockets attached to the sides of the main fuel tank. These are solid rocket boosters, or SRBs. The SRBs are made by Thiokol at their factory in Utah . The engineers who designed the SRBs would have preferred to make them a bit fatter, but the SRBs had to be shipped by train from the factory to the launch site. The railroad line from the factory happens to run through a tunnel in the mountains, and the SRBs had to fit through that tunnel. The tunnel is slightly wider than the railroad track, and the railroad track, as you now know, is about as wide as two horses' behinds.

So, a major Space Shuttle design feature of what is arguably the world's most advanced transportation system was determined over two thousand years ago by the width of a horse's ass. And you thought being a horse's ass wasn't important? Ancient horse's asses control almost everything and...

Current Horses Asses are controlling everything else.

WB7: Finally, this ties into the width of the columns fronting the New York Stock Exchange which explains why there are so many horse's asses on Wall Street, which coupled with the size of the columns on the Federal Reserve Bank and the gauge of the NY-DC AMTRAK Metroliner further  explains why  horses asses are running the US economy.

OBAMA MOONS NASA

BANZAI7 NEWS--NASA's grand plan to land on the moon, built on President George W. Bush's vision of an ambitious chapter in space exploration, is about to vanish with hardly a whimper.

With the release Monday of President Obama's budget request, NASA will get the new administration's new marching orders, and there won't be anything in there about flying to the moon. Instead, the US will be sending missiles to Taiwan.

Obama said: "I know this is hard to believe, but my predecessor apparently was unaware that we already landed on the moon and I love Taiwanese food. Let the Chinese conquer the moon, they haven't been there yet."

GREAT NEWS HONEY! WE GET TO RIDE ON THE SAME WINDING MOUNTAIN ROAD IN A BIGGER AND FASTER CAR

BANZAI7 NEWS--The Special Inspector General for TARP issued his Quarterly Report to Congress Saturday.  Here is an excerpt:
The substantial costs of TARP — in money, moral hazard effects on the market, and Government credibility — will have been for naught if we do nothing to correct the fundamental problems in our financial sys- tem and end up in a similar or even greater crisis in two, or five, or ten years’ time. It is hard to see how any of the fundamental problems in the system have been addressed to date.
•    To the extent that huge, interconnected, “too big to fail” institutions contributed to the crisis, those institutions are now even larger, in part because of the sub- stantial subsidies provided by TARP and other bailout programs.
•    To the extent that institutions were previously incentivized to take reckless risks through a “heads, I win; tails, the Government will bail me out” mentality, the market is more convinced than ever that the Government will step in as neces- sary to save systemically significant institutions. This perception was reinforced when TARP was extended until October 3, 2010, thus permitting Treasury to maintain a war chest of potential rescue funding at the same time that banks that have shown questionable ability to return to profitability (and in some cases are posting multi-billion-dollar losses) are exiting TARP programs.
•    To the extent that large institutions’ risky behavior resulted from the desire to justify ever-greater bonuses — and indeed, the race appears to be on for TARP recipients to exit the program in order to avoid its pay restrictions — the current bonus season demonstrates that although there have been some improvements in the form that bonus compensation takes for some executives, there has been little fundamental change in the excessive compensation culture on Wall Street.
•    To the extent that the crisis was fueled by a “bubble” in the housing market, the Federal Government’s concerted efforts to support home prices — as discussed more fully in Section 3 of this report — risk re-inflating that bubble in light of the Government’s effective takeover of the housing market through purchases and guarantees, either direct or implicit, of nearly all of the residential mortgage market.

Stated another way, even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car.
SIGTARP: January 2010 Quarterly Report to Congress

BANKER DISTRUST

REUTERS--The annual Edelaman Trust Barometer released at Davos shows that college-educated, so-called "opinion leaders" around the world have lost a huge amount of trust in banks. In the United States, for example, the trust level has plummeted to just 29 percent of those surveyed from 68 percent in 2007.

TODAY'S QUOTE

"I am well aware that there are interested parties that long to return to “business as usual,” even while retaining the comfort of remaining within the confines of the official safety net. They will argue that they themselves and intelligent regulators and supervisors, armed with recent experience, can maintain the needed surveillance, foresee the dangers and manage the risks.
In contrast, I tell you that is no substitute for structural change, the point the president himself has set out so strongly.

I’ve been there — as regulator, as central banker, as commercial bank official and director — for almost 60 years. I have observed how memories dim. Individuals change. Institutional and political pressures to “lay off” tough regulation will remain — most notably in the fair weather that inevitably precedes the storm.

The implication is clear. We need to face up to needed structural changes, and place them into law. To do less will simply mean ultimate failure — failure to accept responsibility for learning from the lessons of the past and anticipating the needs of the future."


Paul Volcker-NYT Op Ed

FED OFFICIAL WARNS BANK'S NOT TO LEND

BANZAI7 NEWS--The Federal Reserve's No. 2 official issued a stern warning to investors, banks and other financial institutions Friday: Don't be complacent, interest rates are going up at some point and they will trigger new market turmoil if you're not prepared.

"We are in uncharted waters for monetary policy and the financial markets," Donald Kohn, vice chairman of the Federal Reserve, said in a speech to bankers at the Federal Deposit Insurance Corp.

Rattling off a long list of uncertainties—including a rising budget deficit, foreign demand for U.S. debt and the strength of the recovery—Mr. Kohn said bankers need to start preparing now for the risk that interest rates could move swiftly in unexpected directions, most likely up.

WB7: Reading between the lines, this guy is telling banks not to lend money at today's cheap rates since rate increases are a certainty.

Here is a decade old article pondering why banks won't lend.

PROFESSIONAL BULLSH%T

The six statistically most full of SH#T professions can be viewed here.

CELEBRITY HOMEBOY/TAXI DRIVER PAUL GOATEE CALLS FOR ACTION ON GLOBAL WARMING AT PETA FUND RAISER

Photo Source: Pakistan Intelligence Service

“This is a message to the whole world about those responsible for climate change and its repercussions – whether intentionally or unintentionally – and about the action we must take together.  Speaking about climate change is not a matter of intellectual luxury – the phenomenon is a true actual fact.”

AIGFinancialProducts@hotmail.com

Washington, DC – On Tuesday, Rep. Steve Israel (D – Long Island), former Governor Eliot Spitzer (D – N.Y.) and Professor Frank Partnoy of the University of San Diego School of Law announced the introduction of new legislation to get to the bottom of the AIG collapse with an open source investigation. Rep. Israel introduced the Financial Crisis Public Disclosure Act of 2010, which directs the Treasury Secretary to put online the emails of high level AIG employees so the public can conduct an investigation of the company’s collapse and subsequent government bailout.

“Our economy nearly fell off a cliff because a bunch of risky traders made bad decisions. Accountability means knowing who knew what and when. My bill will force AIG to publicly open company emails from top employees so we can find out what they were thinking as they made decisions that wrecked our economy,” said Rep. Israel.

“Transparency has been lacking in our examination of AIG. The best route to a full understanding of the roots of the cataclysm will come from an opening of AIG's books and records. I applaud Congressman Israel for pushing this issue,” said former Gov. Spitzer.

DAVOS CIRCUS SUMMIT

BANZAI7 NEWS--Top banksters and senior regulatory clowns from major economies held informal private talks on regulation that participants called "hilarious" and which produced little concrete result.

The meeting sought to build bridges between banksters and feckless regulators after days of sometime acrimonious discussion in Davos about how much extra regulation should be imposed on banks following the forgotten financial crisis.

Regular laughter emanated through the closed doors of the invitation-only meeting, suggesting the meeting was a circus performance featuring the regulatory clowns and financial magicians at their best.

2010 BANK FAILURE COUNTDOWN

BANZAI7 NEWS--The credit crunch continued to take its toll on the banking industry as regulators closed five U.S. banks, bringing the total number of failures for the year so far to 14.

At this rate we are well on our way to beating 2009's tally of 140 failed banks.

9/11 TRIAL

BANZAI7 NEWS--Reacting to rising criticism from New York officials and both Democrats and Republicans in Washington, the Justice Department on Friday began considering sites for the trial of Khalid Shaikh Mohammed and four other top Al Qaeda operatives away from the shadow of the toppled World Trade Center.

Crawford Texas currently tops the list since 9/11 can be traced back to George Bush's 2001 summer vacation there.

WALL STREET CRUSADE OR FINANCIAL JIHAD?

NYT--Not so long ago, financiers ruled the roost at the glitzy annual gathering of the global economic elite here in the Swiss Alps. At this year's gathering of the World Economic Forum, the unofficial theme seems to be, "First, kill all the bankers."

The ire directed at bankers from all sides is palpable, acknowledged Osama Bin Banker, chairman of Morgan Stanley in Europe, as he stood alone reading some charts amidst the hubbub at the forum's Global Village cafe.

Asked which other groups of people have been similarly unpopular in Davos in the past, he said: "terrorists."
  

OSAMA BIN GOATEE

BANZAI7 NEWS--Osama bin Goatee urged DAVOs delegates to end reliance on the U.S. dollar as one solution to the global financial crisis and said the Volcker plan did not go far enough. He also blamed developed countries for climate change but forgot to mention his petrol financed family fortune. He went on to complain bitterly about the Toyota recall and lamented that there are no Toyota dealers in Waziristan.

Photo Source: FBI

Bin Goatee also revealed that Al Qaeda is considering changing its name to AL PETA.

BANZAI7 NEWS--EYE WITNESS REPORT

 

View from top of the walkup building across the street.

BANZAI7 NEWS--A six-storey walkup in 45, Ma Tau Wai Road in Hung Hom/To Kwa Wan, Hong Kong crumbled at about 1.30pm. Two persons died, two were injured and four are missing.

While Hong Kong is a modern city, there remain many old structures of dubious safety.

 

Buildings similar to the one that collapsed.

GOLDMAN GEEK

BANZAI7 NEWS--A Geek team from Goldman Squid was in Athens yesterday shepherding representatives of Paulson, the US hedge fund, around meetings with local bankers, economists and analysts.

In the past, Greek governments made a point of sharing out advisory work among investment banks, mainly for privatisation projects. Morgan Stanley, Credit Suisse, Deutsche Bank and UBS won mandates as well as Goldman and JPMorgan.

That has changed. "Goldman pretty much has taken a leading role on formulating Greece's bailout," said a Greek economic consultant. "Their competitive advantage is that they have the most hands on experience with bailouts, the have a big team of Geeks (not Greeks), they have purchased a major CDS position opposite a Greek default and their bald heads as smooth as the finest Greek antique urns." 

BANKSTER SUMMIT

BANZAI7 NEWS--During the panel discussions at the World Economic Forum, participants didn’t hesitate to proclaim that tougher bank regulations were (or weren’t) needed. But it turns out there were more discussions along the sidelines, according to Bloomberg News.

About 30 bankster executives, like Brian Moneyhands of Bankster of America, Oswald Grubber of UBS, Josef Axemann of Deutsche Bank and Rob Your Diamonds of Barclays, gathered for a closed-door meeting to coordinate the family's response to the global calls for more stringent financial regulation.

TODAY'S QUOTE

“Someone reminded me I once said greed is good...Now it seems it’s legal.”
Gordon Gekko 2010

TOO BIG TOO FAST/NOT TOO BIG TO FAIL

BANZAI7 NEWS--Three or four years ago senior Honda executives demanded to know from their underlings how arch-rival Toyota could expand its production and sales so quickly and still keep its quality intact.

Now they're getting the answer: Toyota's once-vaunted quality actually was eroding. This week the company suspended the sale of eight different models, including the popular Corolla, Camry and Avalon, for potential safety problems. Next week Toyota will halt production at the five North American factories that make those vehicles.

The company also expanded a recall that already was the largest in automotive history. Some 4.8 million Toyota cars and trucks might suffer from sticking accelerator pedals or faulty floor mats that seem to grab the accelerator (some have been recalled for both reasons) and can cause the car to accelerate out of control. Several deaths have been attributed to the problem.

How could this possibly happen to the car company that was the undisputed leader in quality, the company that all the others from Germany and America and even Japan wanted to emulate? The answer is almost too simple.

Just like Citigroup, Toyota is suffering from trying to get too big, too fast.

Just like Citigroup, in the early years of this century the company sensed weakness among its rivals in the American market, and also opportunity in China and other emerging markets outside the U.S. So it began a headlong expansion spree around the world.

Just like Citigroup, it wound up manufacturing and selling shoddy products. However, unlike Citigroup, Toyota is not too big to fail. Moreover, unlike Toyota, Citigroup is not required to recall its defective financial products and its has not suspended trading.

Meanwhile, 2big2fail GM, sees an opportunity 2big2let go buy...

TIMMY GEITHNER: BRANDED

BANZAI7--A day after facing furious lawmakers on Capitol Hill, Treasury Secretary Tim Geithner told CNN on Thursday that he would forever "carry the burden" of the decision to bail out AIG.


BRANDED

All but one man lied.
About AIG.
And he says he saved the day.

Branded, scorned as the one who got scammed.
What do you do when you're branded, and you know you're a man.

Wherever you go, for the rest of your life
You must prove, you're a man.

I NEED A DRINK

BANZAI7  NEWs--Henry Paulson says he was scared in the late summer of 2008. And who can blame him. Lehman Brothers was about to collapse, AIG was crumbling and the world markets were jumpy.
So the former Treasury Secretary says he turned to God for help, Paulson writes in his soon to be released book “I Need a Drink.”

In September 2008, as the financial world was falling apart, Paulson writes that he admitted to his wife that he was moritifed. She encouraged him to pray and together they recited the Bible’s Second Book of Timothy, Verse 1:7 – “For God hath not given us the spirit of fear, but of power, and of love, and your  out of your freeking mind.”

After that Paulson said he felt he could free the vipers and began making calls to government officials that Dick Fuld of Lehman was a dead man walking.

If Wall Street is motivated by fear and greed, Paulson projects just the opposite image of himself throughout the book. God's work is a theme familiar to all Goldman Sachs alumnis.

TAKE IT ANY WAY YOU WANT IT

BANZAI7 NEWS--WSJ reports,  despite their tough talk about clamping down on pay, banks and securities firms are using other financial perks to ease the toll on employees.

Bank of America Corp. and Citigroup Inc. are doling out shares that employees can sell within months—much sooner than normally allowed. Other giant banks, including Goldman Sachs Group Inc. and Royal Bank of Scotland Group PLC, let certain employees borrow money to relieve personal cash crunches. And some U.K. banks have considered raising base, or cash salaries—funds that won't be subject to the country's new 50% tax on bonuses.

Such moves are a contrast to concessions recently made by large financial firms in hopes of defusing public anger, and political retaliation, over the comeback of sky-high compensation. Many banks and securities firms are paying bonuses with a bigger percentage of stock. Goldman, for example, sharply reined in pay and benefits during the fourth quarter. This week, the firm told partners that 60% of their 2009 bonuses will be in the form of restricted stock.

Some of Citigroup's stock awards are almost as liquid as cash.

The new pay culture is squeezing bankers with hefty mortgage payments and private-school tuition bills—and has prompted some companies to find ways to assist cash-squeezed employees.
"I know it sounds ridiculous to Main Street, but it's a real hardship," says Gary Goldsteal, who runs, a financial-services job-search firm in New York. "So firms are trying to help out any way they can."

Cheap loans are the most popular form of financial aid for traders and investment bankers. Gustavo Dolefino, a senior managing director at recruiting firm Secretive Solutions, says sweatheart loans "are happening all over" Wall Street. They include a type of bridge loan made to tide over employees whose fixed ponziesque operating expenses outstrip available cash resources.

Such loans aren't new, experts say, but they are becoming more common. Unlike normal borrowers, bankers and traders sometimes can get below-market rates on non-recourse loans or face lighter collateral requirements, industry officials say.

A rise in favorable employee loans could fuel new resentment over the pay culture at financial companies. Many banks remain tight about lending cheap Federal money to ordinary consumers and small businesses. Loan balances at U.S. banks shrank by 2.8% in last year's third quarter, the largest decline in at least 25 years, according to the Federal Deposit Insurance Corp.

WB7: Readers of this Blog should not be surprised.

TALIBAN TARP or FINANCIAL JIHAD

Britain is ready to contribute millions of dollars to a fund to bail out Taliban gunmen who are fighting British troops in southern Afghanistan.

More than 60 delegations, from Colombia to Australia, will gather in Lancaster House Thursday Morning to draw up an exit strategy from Afghanistan. Much of it is based on bailing out the Taliban rank and file, wooing the Taliban leadership with special bonuses and gradually handing over the Afghan banking system. The plan will be called "Bonuses not Bombs."

The conference is expected to agree a $500 million, five-year fund for President Karzai to “bail out” insurgents who are not ideologically committed to destroying the West.

What happens when the $500 million runs out? You don't have to be Einstein to figure that one out.

PEAK DOUCHE BAG

BANZAI7 NEWS--Don't kid yourself into thinking petroleum isn't going to remain the dominant source of energy for decades to come, oil-industry douche bags said Thursday at the World Economic Forum's annual meeting.

"There is too much rhetoric about moving away from oil" and of nations achieving energy "independence," said Khalid A. Al Falih, CEO of Saudi Aramco, Saudi Arabia's state-owned oil company, in a panel discussion. "We have you all by your camel's balls."

ALL OUR YESTERDAYS--STARDATE 5943.7

Scotty, can you get us out of here?

24 Hour I-PAD

San Francisco, California (CNN) -- Punch lines about hygiene products flooded the blogosphere on Wednesday only moments after Apple Inc. announced it would call its new touch-screen computer the "iPad."

"The mocking goes along the lines of: Yes, the iPad is small, lightweight and slim. But can you swim with it?" wrote the Los Angeles Times' tech blog.

The term iTampon -- a riff on the fact that the iPad can be taken to sound more like a maxipad than a slick new computer -- was the third most-talked about trend on Twitter on Wednesday evening.

Some female bloggers wrote that Apple seemed not to have any women on its marketing team.
"With "iTampon" quickly emerging as a trending Twitter topic, it's probably safe to say that many women found themselves cringing as they asked, 'Do any women work at Apple?'

TODAY'S QUOTES

"The public—as aggrieved owners, taxpayers, and savers—has every right to question the banks' methods and practices. If they don't want us poking around their business, they can shrink their balance sheets, replace subsidized debt with market debt, stop relying on the Federal Reserve for funding, and get out of our index funds. As film mogul Samuel Goldwyn once said: "Include me out!"---Newsweek

"Over the last few years, everything has been given to financial capitalism, and nothing has gone to labor. All that mattered was the present─the future counted for nothing. Companies took higher profits, yet inequity continued to grow. Capitalism is not an end─it should be a means to an end...If we don't reform the system, we'll be taking unforgivable risks in the future."--French President Nicholas Sarkozy

TA DAAAAAA

Line up for Jobs

DAVOS DUST UP-STAY OUT OF THE MIDDLE

BANZAI7 NEWS--A group of American and Japanese Davos delegates engaged in a slope side tussle with delegates from the European Central Bank early this morning...

HIGH SPEED RAIL--WHERE'S THE TICKET?

BANZAI7 NEWS--President Barack Obama is planning to follow up his State of the Union address on Wednesday by awarding billions of dollars to develop a high-speed rail plan that he’ll promote as a jobs program, according to an Associated Press report.

Obama and Vice President Joe Biden will be in Tampa for a town hall meeting where the $8 billion in stimulus funds will be announced.
 
Contenders for the money include California’s proposal for an 800-mile-long rail line from Sacramento to San Diego,  a nine-state proposal in the Midwest and a proposal to link Wall Street with Las Vegas Nevada the AP reported.

Thirty-one states will divide $8 Billion.  That's roughly the amount of interest AIG owes Uncle Sam every 15 minutes.

ALLLLLLL ABOOOOOOARD.

LEAN OVER DELEGATES

BANZAI7 NEWS--All participants in the WEF as part of their conference kit have been issued with a bottle of  gel. Presumably this is gel for use after shaking hands with a banker, though the organisers don’t explain.

WELCOME TO THE DOOM LOOP

REUTERS--The Bank of England estimates governments the world over have spent or committed a staggering $14 trillion to prop up the financial system following the fall of Lehman Brothers in September 2008 

So, what did we get for all that dough?

Unfortunately, more questions than answers.

Indeed, many of the factors that helped cause the previous crisis -- a sustained period of low interest rates, high levels of consumer debt in the West and excessive risk-taking by financial institutions -- remain in place.

At the same time, supersized government bailouts could have created the conditions for future financial crises that will be larger and even more expensive than the one the world has just suffered.
Despite the protestations by politicians that such a large-scale rescue should never be allowed to happen again, their actions over the past two years suggest the opposite.

"Knowing this, the rational response by market participants is to double their bets. This adds to the cost of future crises," Piergiorgio Alessandri and Andrew Haldane of the Bank of England wrote recently.

"This is a doom loop."

EURO-UBINI

BANZAI7 NEWS--New York University Professor Nouriel Roubini said he’s never been more pessimistic about the future of European monetary union, saying Spain poses a looming threat to the euro region holding together.

“Down the line, not this year or two years from now, we could have a breakup of the monetary union,” Roubini said in a Bloomberg Radio interview from the World Economic Forum’s annual meeting in Davos, Switzerland. “It’s a rising risk.”

TIMMY"S BIG DAY

BANZAI7 NEWS--U.S. Treasury Secretary Timothy Geithner on Wednesday will tell lawmakers that he wasn't involved in deciding what information to disclose about controversial payments the rescued American International Group made to its counterparties. [Somebody please ask him who was.]


"I had no role in making decisions regarding what to disclose about the specific financial terms of Maiden Lane II and Maiden Lane III, and payments to AIGs counterparties," he plans to tell the U.S. House of Representatives Government Oversight and Reform Committee, referring to the $62.1 billion in payments and to separate Federal Reserve funding facilities set up to purchase assets from the troubled insurance giant.

WB7: Lets say a bank decides to make a $62 Billion Dollar emergency loan to a client. Do you think the CEO of that bank does not care what is said publicly? If this flimsy defense is true, Geithner is the epitome of a white gloved CEO who knows little about the buffoonery of his underlings.
 

TIMMY PLAYS BAILOUT JUMANJI

BANZAI7 NEWS--Here are excerpts from an email sent to Tim Geithner by a New York Fed official at 3:18 in the morning on Sept. 16, 2008, one day after the NY Fed ordered Lehman Brother to file for bankruptcy, interlineated with BANZAI7 commentary.

Re:  “Systematic Impact of AIG and Lehman Failure,’’

“Larger surprise factor than Lehman….
[WB7: Lehman's bankruptcy turned out to be a much bigger surprise than they expected. We all know what happened next.]

“Occurs on the back of Lehman bankruptcy, market currently unsure of their positions and functioning is being tested…’’
["Holy shit, I think we just rolled the Jumanji dice."]

“AIG derivatives book more complex than Lehman”
[It was bigger but equally as inexplicable and complex as Lehman's box of toxic spaghetti. ]

“Bankruptcy of AIG CP has significant contagion potential…”
[Bankruptcy of AIG will almost certainly bring down Goldman Sachs and foreign banks]
  
“AIG would fail to perform on annuities and stable value wraps; latter drives asset sales and breaking-of-the buck for money funds.”
[The best strategy is to make sure your giant 2big2fail tentacles are touching everything in the system. Hey, that sounds like Goldman Sachs.]

UP IN SMOKE

BANZAI7 NEWS--Medical marijuana dispensary advocates assailed the Los Angeles City Council's vote today to approve a medical marijuana ordinance, saying the measure was unworkable and would dramatically restrict access to patients who need the drug.

VERIZON JOBLESS HORIZON

BANZAI7 NEWS--After posting a fourth-quarter loss, Verizon Communications, Inc. said Tuesday it plans to cut about 13,000 jobs this year. Of those, 6,000 are employees who send  FiOS junk mail to New York area residents every 24 hours. The remaining 7,000 are FiOS employees who call on the phone before and after New Yorkers eat dinner every evening. All 13,000 will be replaced by a hotel room full of 12 Mumbai used car dealers armed with Skype phones.

Verizon recorded a net loss of $653 million, or 23 cents per share, compared with a profit of $1.24 billion, or 43 cents a share, a year earlier. Sorry to hear it.

TODAY'S QUOTE

"If a drunk driver killed your neighbors and crashed the car into your house, you wouldn't expect a police officer to hand the offender a bottle of whiskey and the keys to a bigger, faster, and more powerful car. You would be outraged if the officer said he would only impose a fine, and then made you lend the drunk the money to pay the fine.

Yet this is the modus operandi of our financial system, and now financial drunk drivers refuse blood tests and huff that their seat belts were fastened."

http://www.huffingtonpost.com/janet-tavakoli/show-bernanke-and-geithne_b_432897.html

DAVOS UPDATE

WORLD ECONOMIC FORUM
DAVOS SWITZERLAND
FOR IMMEDIATE RELEASE

"DOING GOD'S WORK: FINANCIAL JIHAD OR WALL STREET CRUSADE"

THE WORLD ECONOMIC FORUM has released the following  program summary for this week's annual meeting.

Focus Topic 1:  WALL STREET MIRACLE MONGERS AND THEIR METHODS

Focus Topic 2:  GLOBAL PONZINOMICS--WHERE DO WE GO FROM HERE

Focus Topic 3:  TRANSPARENCY: BESPOKE STANDARDS FOR DEVELOPED AND DEVELOPING ECONOMIES

Focus Topic 4:  POPULISM: A NEW VIRUS FOR THE NEW DECADE

Focus Topic 5:  TOO BIG TO FAIL OR TOO DUMB TO KNOW BETTER?

Focus Topic 6:   ORGANIZING YOUR OWN FINANCIAL NUREMBERG

Focus Topic 7:  DUBAI: A CASE STUDY IN FINANCIAL IDIOCY

Focus Topic 8:  THE GOSPEL ACCORDING TO BLANKFEIN: How to rehabilitate a gambling addict (LIVE  VIDEO CONFERENCE LINKUP FROM GAMBLING RECOVERY CENTER)

Focus Topic 9:  DOES THE WORLD REALLY NEED HEALTHCARE OR CAN WE JUST CHARGE PREMIUMS?

Focus Topic 10: LIFE AFTER CONAN

Focus Topic 11: HOW TO ORDER FROM A CHINESE MENU

Focus Topic 12:  BANKER PIE THROW

SPECIAL NOTICE: Forum delegates are advised not to eat the complementary Davos Summit Salamis found in their hotel rooms.

RETURN OF BANKER SCOURGE

BANZAI7 NEWS--New and exotic securities and more frequent use of government funded bailouts seem to be contributing to a new wave of toilet seat dermatitis afflicting bankers, a condition which was once considered as completely wiped out from Wall Street.

A new research has revealed that there has been, very recently, a surge of new cases of toilet seat dermatitis in senior Wall Street executives, some of whom will continue to suffer with the condition for years before getting a proper diagnosis and treatment.

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Toilet seat dermatitis is one of those legendary conditions described in financial textbooks and seen in undeveloped countries with economies in the shitter, but with all the anxiety caused by angry populists screaming its time for payback, Wall Street executives will be spending lots more time on their gold handled commodes.

BEYOND THE THUNDERDOME

BANZAI7 NEWS--Bill Gates said he fears Earth might become a post-subprime  industrial wasteland plagued by heat, chronic food and energy shortages, roving bands of outlaw investment bankers, all manner of mutant Mac products, rampant disease and H1N1 vaccine addicts and serial asset bubbles unless governments and private organizations invest more time and money solving what the Microsoft chairman believes are a recipe for doom. 
  
"If we project what the world will be like 10 years from now without innovation in health, education,  financial reform, energy, or food, the picture is quite bleak," said Gates, in his annual letter from the Bill & Melinda Gates Foundation, published earlier this week. 

Roving bands of outlaw investment bankers.

KING RINGS GONG TO BANKER'S BONG

BANZAI7 NEWS--Mervyn King, governor of the Bank of England, said Tuesday that President Barack Obama had put "radical reform" on the agenda for global regulators with his plan to restrict the size and trading activities of the biggest banks in the U.S.

Speaking before a parliamentary committee Tuesday, King said regulators should be looking at as many different options as possible to ensure the recent massive bailouts of the financial system aren't repeated.
He said major changes are needed, but that authorities should take time to come up with the best solution and phase in new rules.

"What the proposals announced last week did is to make it very clear that radical reform is on the table, and that is the most important thing" King said.

WB7: Why can't we find someone like this to run the Fed?

VIKRAM PANDIT EATS IT

NYT--Some critics of finance may assume that all Wall Street executives enjoy are the finest and most expensive of meals. Nothing less than the power-lunch extravaganzas at the Four Seasons or San Pietro will do.

That’s not always true. Just ask Vikram S. Pandit.

It turns out that the Citigroup chief executive appreciates more homey fare, including Sylvia’s, the famed Harlem soul food joint, and SushiAnn, a self-proclaimed “no-nonsense” sushi restaurant right around the corner from the bank’s Midtown Manhattan offices.

Weird Al Yankovic - Eat It
Uploaded by jpdc11. - See the latest featured music videos.

VIRAM PANDIT SING'S EAT IT
(Eat It, Wierd Al Yankovic)
WilliamBanzai7

Sing along: http://www.youtube.com/watch?v=HyfcOriVKBM

How come you're always such a fussy bankster man?
Don't want no 3 Martini lunch, don't want no Russian caviar with clams
Well, why don't you know bankers are starving in Japan
So eat it, just eat it (prrr)

Don't wanna argue, I don't wanna debate
Don't want to hear about what kind of FDIC financed food you hate ooh
You won't get no dessert 'till you clean off your bailout plate
So eat it, don't you tell me you're full

Just eat it, eat it, eat it
Get yourself an egg and beat it
Have some more fried chicken, have some more sweet tater pie
It doesn't matter, it's broiled or fried
Just eat it, eat it, eat it, eat it
eat it, eat it, eat it, eat it, ooh

Your board room manners are a smorgasborg of shame
You're playin' with your bailout food like it's some kind of game
Now, if your bankers starve to death, you'll just have yourself to blame
So eat it, just eat it (prr)(burp)

You better listen, better do what you're told ooh
You haven't even touched your subprime tuna sushi roll ooh
You better chow down or it's gonna get warm before it gets cold
So eat it

I don't care if you're full
Just eat it, eat it, eat it, eat it
Open up your mouth and feed it
Have some more bonus cap yogurt, have some more Volcker spam
It doesn't matter if it's fresh or canned
Just eat it, eat it, eat it, eat it
Don't you make me repeat it
Have a  modified mortgage banana, have a whole bunch
It doesn't matter what you have for lunch
Just eat it, eat it, eat it, eat it
Eat it, eat it, eat it, eat it
(hoh hoh hoh hoh hoh)

Eat it, eat it, eat it, eat it
If your stocks gone cold, reheat it
Have a big dinner, have a light snack
If you don't like it you can't send it back
Just eat it, eat it, (woohoo) eat it, eat it
Get yourself an egg and beat it (oh lord)
Have some more fried chicken,(woohoo) have some more sweet tater pie (woohoo)
It doesn't matter , it's broiled or fried
Just eat it, eat it, eat it, eat it
Don't you make me repeat it (oh no)
Have a mortgage mod banana,(woohoo) have a whole bunch
It doesn't matter what you had for lunch
Just eat it, eat it, eat it, eat it

CENSORSHIP AMERICAN STYLE

BANZAi7 NEWS-Chinese state media stepped up their war of words with the United States over Internet control on Tuesday, with a top newspaper claiming a Web 2.0 conspiracy and saying the ban on hand held texting by truckers and bus drivers is another example of official censorship in the US. The other recent example cited was the Fed coverup of the AIG backdoor bailout.

SUBPRIME BABEL REMEMBERED

Save us Ben! Only you can do it!

WALL STREET'S SURROGATE LOBBYING CAMPAIGN KICK'S OFF

BANZAI7 NEWS--Warren Buffett, a mojr shareholder of Goldman Squid, opposes President Barack Obama’s proposed levy on financial institutions because firms including Goldman Squid and Wells Fargo & Co. already repaid bailout funds and it will adversely impact his Goldman stake.

ZORCONIUM CROWN JEWEL HELD FOR POSTERIOR

BANZAI7 NEWs--FT reports AIG, the US government's insurance subsidiary, has decided against a sale of its aircraft leasing unit after concluding it would not reap a big enough profit from the divestment of one of its zirconium crown jewels, say people close to the matter.

The decision to keep most of International Lease Finance Corp, at least in the short term, will force the insurer to keep funding the debt bloated ($30 billion) division either through its cash resources or by raising additional bailout financing from the US government. Robert Beanmush would prefer to save this zirconium diamond in the rough for his posterior.

That, in turn, could further strain the troubled insurer's finances at a time when it is scrambling to repay about $80bn in bailout booty to the US Treasury and the Federal Reserve.

GOLDMAN NEEDED A HAIRCUT

WSJ--Another juicy detail has emerged from the saga of Goldman Squid and AIG. As everybody knows, AIG got a huge government bailout in September 2008 to help make payments on derivatives contracts with banks, including Goldman. Yet in the previous month, Goldman approached AIG about "tearing up" its contracts, according to a November 2008 analysis by Blackrock, then an adviser to the New York Fed.

Why might AIG have accepted termination? Perhaps if it thought the underlying CDO assets were worth holding instead of a derivative liability to Goldman. Or if Goldman was willing to accept less than face value to close the contracts out.

So was Goldman prepared to offer AIG a haircut in the month before its rescue? A legitimate question, given that Goldman refused to accept  a haircut when the New York Fed raised the idea after it bailed out AIG.