On Liquidity And The False Recovery | ZeroHedge:
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Friday, March 30, 2012
Monday, March 26, 2012
Bernanke Decrees: Gold Rips, VIX Slips, And Volume Dips | ZeroHedge
Bernanke Decrees: Gold Rips, VIX Slips, And Volume Dips | ZeroHedge: "What is quite entertaining is watching CNBC explain this new reality as dismal data disappointing everywhere and Pisani facing up to a new normal non-recovery in housing and yet the performance of stocks is somehow magically fundamentals supported by the Fed's actions (indirectly instead of directly via pure debasement)...you can tell even their tough veneer of perma-bullishness is starting to crack at the addicted liquidity-fueled monster that Ben and his friends have unleashed..."
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How Banks are Lying about their true exposure.....small issue called "Counter party risk"....OR....what if the other guy is full of shit too !!
Bloomberg begins with some simple math: the concept that is seemingly most disturbing to the status quo, not only in Europe, but now in the US as well.
Guarantees provided by U.S. lenders on government, bank and corporate debt in those countries rose by $80.7 billion to $518 billion, according to the Bank for International Settlements. Almost all of those are credit-default swaps, said two people familiar with the numbers, accounting for two-thirds of the total related to the five nations, BIS data show.
The payout risks are higher than what JPMorgan Chase & Co. (JPM), Morgan Stanley and Goldman Sachs Group Inc. (GS), the leading CDS underwriters in the U.S., report. The banks say their net positions are smaller because they purchase swaps to offset ones they’re selling to other companies.
So far so good: after all this is the same argument that not only the banks themselves, but CNBC, sell side analysts and everyone else conflicted enough to trump myth over reality has used in the past month and a half. Alas, the argument stops there, because there is a very critical second part to the argument, one which however is voiced not by a fringe blog but by a member of the, gasp, status quo itself:
With banks on both sides of the Atlantic using derivatives to hedge, potential losses aren’t being reduced, said Frederick Cannon, director of research at New York-based investment bank Keefe, Bruyette & Woods Inc.
“Risk isn’t going to evaporate through these trades,” Cannon said. “The big problem with all these gross exposures is counterparty risk. When the CDS is triggered due to default, will those counterparties be standing? If everybody is buying from each other, who’s ultimately going to pay for the losses?”
Reread the bolded text enough times until you have enough information to debunk the next time clueless advocates of Morgan Stanley and other banks scramble to say that the banks are hedged, hedged, hedged. No. THEY ARE NOT. And as the AIG debacle demonstrated, once the chain of bilateral netting breaks, whether due to the default of one AIG, one Dexia, one French or Italian bank, or whoever, absent an immediately government bailout and nationalization, which has one purpose and one purpose alone: to onboard the protection written to the nationalizing government, then GROSS BECOMES NET! This also means that should things in Europe take a turn for the worst, Morgan Stanley's $39 billion in gross exposure really is.. $39 billion in gross exposure, as we have been claiming since September 22.
For those still confused here is Bloomberg with more:
Similar hedging strategies almost failed in 2008 when American International Group Inc. couldn’t pay insurance on mortgage debt. While banks that sold protection on European sovereign debt have so far bet the right way, a plan announced yesterday by Greek Prime Minister George Papandreou to hold a referendum on the latest bailout package sent markets reeling and cast doubt on the ability of his country to avert default.
Which explains why the banks are if not lying, then taking advantage of a gullible public to misrepresent their exposure by as much as a factor of ten!
Five banks -- JPMorgan, Morgan Stanley, Goldman Sachs, Bank of America Corp. (BAC) and Citigroup Inc. (C) -- write 97 percent of all credit-default swaps in the U.S., according to the Office of the Comptroller of the Currency. The five firms had total net exposure of $45 billion to the debt of Greece, Portugal, Ireland, Spain and Italy, according to disclosures the companies made at the end of the third quarter. Spokesmen for the five banks declined to comment for this story.
Well naturally the banks will represent a far lower and far more manageable number than the one which is sure to inspire nothing short of panic. We wonder: was MF Global's $6 billion in Italian exposure part of this net exposure? Does this mean that America's top banks, sans MF, have just, don't laugh, $39 billion in exposure?
So let's go back to the math to see what the real exposure is:
The CDS holdings of U.S. banks are almost three times as much as their $181 billion in direct lending to the five countries at the end of June, according to the most recent data available from BIS. Adding CDS raises the total risk to $767 billion, a 20 percent increase over six months, the data show. BIS doesn’t report which firms sold how much, or to whom. A credit-default swap is a contract that requires one party to pay another for the face value of a bond if the issuer defaults.
Shhh, don't tell anyone, but not only is the total gross exposure many, many times than what the banks have represented, but inf act US banks have been aggressively selling protection in the first half of 2011!
And here is where the lies get downright surreal:
While the lenders say in their public disclosures they have so-called master netting agreements with counterparties on the CDS they buy and sell, they don’t identify those counterparties. About 74 percent of CDS trading takes place among 20 dealer- banks worldwide, including the five U.S. lenders, according to data from Depository Trust & Clearing Corp., which runs a central registry for over-the-counter derivatives.In theory, if a bank owns $50 billion of Greek bonds and has sold $50 billion of credit protection on that debt to clients while buying $90 billion of CDS from others, its net exposure would be $10 billion. This is how some banks tried to protect themselves from subprime mortgages before the 2008 crisis. Goldman Sachs and other firms had purchased protection from New York-based insurer AIG, allowing them to subtract the CDS on their books from their reported subprime holdings.
Yet what happened next is a vivid memory to all:
When prices of mortgage securities started falling in 2008, AIG was required to post more collateral to its CDS counterparties. It ran out of cash doing so, and the U.S. government took over the company. If AIG had collapsed, what the banks saw as a hedge of their mortgage portfolios would have disappeared, leading to tens of billions of dollars in losses.
“We could have an AIG moment in Europe,” said Peter Tchir, founder of TF Market Advisors, a New York-based research firm that focuses on European credit markets. “Let’s say Greece defaults, causing runs on other periphery debt that would trigger collateral requirements from the sellers of CDS, and one or more cannot meet the margin calls. There might be AIGs hiding out there.”
Also, recalling AIG, the way most banks protect against this contingency, is to buy CDS on the counterparty itself, thereby layering netting concerns on netting concerns, and pushing even more net exposure onto the strongest credit in the link:
Banks also buy CDS on their counterparties to hedge against the risk of trading partners going bust, Duffie said. To ensure those claims are paid, the banks may be turning to institutions deemed systemically important, such as JPMorgan, according to Duffie. The bank, the largest in the U.S. by assets, accounts for a quarter of all credit derivatives outstanding in the U.S. banking system, according to OCC data.
Goldman Sachs said it had hedged itself against the collapse of AIG by buying CDS on the firm. Company documents later released by Congress showed that some of that protection was purchased from Lehman Brothers Holdings Inc. and Citigroup, firms that collapsed or were bailed out during the crisis.
However, had AIG failed, and had the full "bilateral netting" chain been broken, not only would Goldman not receive a single penny on the CDS it had bought on AIG, the firm itself would be insolvent in hours. And here is where the global bailout of the financial system stepped in: to prevent the entire chain of tens of trillions in gross CDS exposure becoming net. But that is the topic of a different post...
As for this one, the only reason why US banks represent net as the only exposure that is relevant, stems from one simple assumption:
U.S. banks are probably betting that the European Union will also rescue its lenders, said Daniel Alpert, managing partner at Westwood Capital LLC, a New York investment bank.
“There’s a firewall for the U.S. banks when it comes to this CDS risk,” Alpert said. “That’s the EU banks being bailed out by their governments.”
Sound familiar? That's right - this is the logic that MF Global used to not only layer massive "hedged" European risk, but, as latest reports demonstrate, to steal from its accounts to fund short-term liquidity shortfalls.
Where does that leave US banks, and our old favorite, Morgan Stanley?
Hedging and other ways of netting help banks report lower exposures than the full risk they might face. Morgan Stanley said last month that its net exposure in the third quarter to the debt of Spain’s government, banks and companies was $499 million. The Federal Financial Institutions Examination Council, an interagency body that collects data for U.S. bank regulators and disallows some of the netting, said the New York-based firm’s exposure in Spain was $25 billion in the second quarter.
The net figure for Italy was $1.8 billion, Morgan Stanley said, compared with $11 billion reported by the federal data- collection body.
Ruth Porat, 53, Morgan Stanley’s chief financial officer, said during a call with investors after the earnings report last month that the data compiled by regulators didn’t take into account short positions, offsetting trades or collateral collected from trading partners.
“It’s the firms that don’t post collateral because they’re seen as more creditworthy that pose the counterparty risk,” said Tchir. “Those could be insurance companies, mid-size European banks. If some of those fail to pay when the CDS is triggered, then the U.S. banks could be left holding the bag.”
And when they do end up holding the bag, the number in question will be not the $46 billion represented, but the far larger triple digit one pointed out above. Which is why keep a very, very close eye on the Italian bond spread, because if Italy falls, Europe falls, and with it fall not only all the largely undercapitalized French banks (all of them), but the US banks that have not tens, but hundreds of billions of gross CDS exposure facing them, which at that point will be perfectly unhedged as all their transatlantic counterparties will be in the same boat as MF Global.
And the only thing we will hear on CNBC then is how nobody, nobody, could have possibly foreseen this happening...
Sunday, March 25, 2012
JP Morgan Finds Obama, And US Central Planning, Has Broken The Economic "Virtuous Cycle" | Employment/Unemployment
JP Morgan Finds Obama, And US Central Planning, Has Broken The Economic "Virtuous Cycle" | ZeroHedge: "Feroli on the labor force participation rate wildcard - nothing but an optical scam to fool the general peasantry into believing that the unemployment rate is dropping, when in reality we are having a historical economic transformation of unprecedented proportions. And call it lost productivity, or a quality outflow of jobs, end result is the same"
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Thursday, March 22, 2012
Wednesday, March 21, 2012
Spitzer: Federal Reserve is a Ponzi Scheme and an Inside Job. 2009 talk show interview. - He got taken out on the prostitution scandal. Nobody can' be reached out and touched.
Spitzer: Federal Reserve is a Ponzi Scheme and an Inside Job: "Eliot Spitzer went on further, “The most poignant example for me is the AIG bailout, where they gave tens of billions of dollars that went right through — conduit payments — to the investment banks that are now solvent. We [taxpayers] didn’t get stock in those banks, they didn’t ask what was going on — this begs and cries out for hard, tough examination. You look at the governing structure of the New York [Federal Reserve], it was run by the very banks that got the money. This is a Ponzi scheme, an inside job. It is outrageous; it is time for Congress to say enough of this. And to give them more power now is crazy. The Fed needs to be examined carefully.”
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Monday, March 19, 2012
Volatility Falls Most Since FDR as Valuations Sink Like 1995 - Bloomberg
Volatility Falls Most Since FDR as Valuations Sink Like 1995 - Bloomberg: "The benchmark gauge for U.S. equities has gained or lost an average 0.46 percent a day this year, compared with 1.04 percent in 2011, the biggest reduction since 1934, during the Great Depression, according to data compiled by Bloomberg."
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Sunday, March 18, 2012
Why Quantitative Easing Is the Only Game in Town - Business News - CNBC
Why Quantitative Easing Is the Only Game in Town - Business News - CNBC: "The BoE’s view is that QE is a natural extension of monetary policy, necessary when the short rate is 0.5 percent, the lowest rate in the 318 years of the BoE’s existence. With conventional measures exhausted, the BoE, like the Federal Reserve and the European Central Bank, has been driven to try highly unconventional measures instead.
The BoE argues that asset purchases work by restoring confidence, signalling future policy, forcing rebalancing of portfolios, improving liquidity and increasing the money supply when the standard mechanism – lending by banks – has frozen."
'via Blog this'
The BoE argues that asset purchases work by restoring confidence, signalling future policy, forcing rebalancing of portfolios, improving liquidity and increasing the money supply when the standard mechanism – lending by banks – has frozen."
'via Blog this'
What the End Result of the Fed's Cancerous Policies Will Be and When It Will Hit. By Graham Summers
March 17, 2012
Yesterday I noted that the "addict/ dealer" metaphor for the Fed's intervention in the markets was in fact not accurate and that the Fed's actions would be more appropriately described as permitted cancerous beliefs to spread throughout the financial system, thereby killing Democratic Capitalism which is the basis of the capital markets.
Today I'm going to explain what the "final outcome" for this process will be. The short version is what happens to a cancer patient who allows the disease to spread unchecked (death).
In the case of the Fed's actions we will see a similar "death" of Democratic Capitalism and the subsequent death of the capital markets. I am, of course, talking in metaphors here: the world will not end, and commerce and business will continue, but the form of capital markets and Capitalism we are experiencing today will cease to exist as the Fed's policies result in the market and economy eventually collapsing in such a fashion that what follows will bear little resemblance to that which we are experiencing now.
The focus of this "death" will not be stocks, but bonds, particularly sovereign bonds: the asset class against which all monetary policy and investment theory has been based for the last 80+ years.
Indeed, basic financial theory has proposed that sovereign bonds are essentially the only true "risk-free" investment in the world. While history shows this theory to be false (sovereign defaults have occurred throughout the 20thcentury) this has been the basic tenant for all investment models and indeed the financial system at large going back for 80 some odd years.
The reason for this is that the Treasury (US sovereign bond) market is the basis of the entire monetary system in the US and the Global financial system in general. Indeed, US Treasuries are the senior most assets on the Primary Dealers' (world's largest banks) balance sheets. To understand why this is as well as why the Fed's policies will ultimately destroy this system, you first need to understand the Primary Dealer system that is the basis for the US banking system at large.
If you're unfamiliar with the Primary Dealers, these are the 18 banks at the top of the US private banking system. They're in charge of handling US Treasury Debt auctions and as such they have unprecedented access to US debt both in terms of pricing and monetary control.
The Primary Dealers are:
- Bank of America
- Barclays Capital Inc.
- BNP Paribas Securities Corp.
- Cantor Fitzgerald & Co.
- Citigroup Global Markets Inc.
- Credit Suisse Securities (USA) LLC
- Daiwa Securities America Inc.
- Deutsche Bank Securities Inc.
- Goldman, Sachs & Co.
- HSBC Securities (USA) Inc.
- J. P. Morgan Securities Inc.
- Jefferies & Company Inc.
- Mizuho Securities USA Inc.
- Morgan Stanley & Co. Incorporated
- Nomura Securities International Inc.
- RBC Capital Markets
- RBS Securities Inc.
- UBS Securities LLC.
I'm you'll sure you'll recognize these names by the mere fact that they are the exact banks that the Fed focused on "saving" thereby removing their "risk of failure" during the Financial Crisis.
These banks are also the largest beneficiaries of the Fed's largest monetary policies: QE 1, QE lite, QE 2, etc. Indeed, we now know that QE 2 was in fact was meant to benefit those Primary Dealers in Europe, not the US housing market.
The Primary Dealers are the firms that buy US Treasuries during debt auctions. Once the Treasury debt is acquired by the Primary Dealer, it's parked on their balance sheet as an asset. The Primary Dealer can then leverage up that asset and also fractionally lend on it, i.e. create more debt and issue more loans, mortgages, corporate bonds, or what have you.
Put another way, Treasuries are not only the primary asset on the large banks' balance sheets, they are in fact the asset against which these banks lend/ extend additional debt into the monetary system, thereby controlling the amount of money in circulation in the economy.
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When the Financial Crisis hit in 2007-2008, the Fed responded in several ways, but the most important for the point of today's discussion is the Fed removing the "risk of failure" for the Primary Dealers by spreading these firms' toxic debts onto the public's balance sheet and funneling trillions of dollars into them via various lending windows.
In simple terms, the Fed took what was killing the Primary Dealers (toxic debts) and then spread it onto the US's balance sheet (which was already sickly due to our excessive debt levels). This again ties in with my "cancer" metaphor, much as cancer spreads by infecting healthy cells.
When the Fed did this it did not save capitalism or the Capital Markets. What it did was allow the "cancer" of excessive leverage, toxic debts, and moral hazard to spread to the very basis of the US, indeed the entire world's, financial system: the US balance sheet/ Sovereign Bond market.
These actions have already resulted in the US losing its AAA credit rating. But that is just the beginning. Indeed, few if any understand the real risk of what the Fed has done.
The reality is that the Fed has done the following:
1) Set itself up for a collapse: at $2.8 trillion, the Fed's balance sheet is now larger that the economies of Brazil, the UK, or France. And with capital of only $54 billion, the Fed is leveraged at 51 to 1 (Lehman was at 30 to 1 when it failed).
2) Called the risk profile of US sovereign debt into question: foreign investors, now fully aware that the US's balance sheet is suspect (the US has lost its AAA credit rating), are dumping Treasuries (see China and Russia). This has resulted in the Fed now being responsible for the purchase of up to 91% of all new long-term (20+ years) US debt issuance.
3) Put the entire Financial System (not just the private banks) at risk.
The Financial System requires trust to operate. Having changed the risk profile of US sovereign debt, the Fed has undermined the very basis of the US banking system (remember Treasuries are the senior most asset against which all banks lend).
Moreover, the Fed has undermined investor confidence in the capital markets as most now perceive the markets to be a "rigged game" in which certain participants, namely the large banks, are favored, while the rest of us (including even smaller banks) are still subject to the basic tenants of Democratic Capitalism: risk of failure.
This has resulted in retail investors fleeing the markets while institutional investors and those forced to participate in the markets for professional reasons now invest based on either the hope of more intervention from the Fed or simply front-running those Fed policies that have already been announced.
Put another way, the financial system and capital markets are no longer a healthy, thriving system of Democratic Capitalism in which a multitude of participants pursue different strategies. Instead they are an environment fraught with risk in which there is essentially "one trade," and that trade is based on cancerous policies and beliefs that undermine the very basis of Democratic Capitalism, which in the end, is the foundation of the capital markets.
In simple terms, by damaging trust and permitting Wall Street to dump its toxic debts on the public's balance sheet, the Fed has taken the Financial System from a status of extremely unhealthy to terminal.
The end result will be a Crisis that makes 2008 look like a joke. It will be a Crisis in which the US Treasury market implodes, taking down much of the US banking system with it (remember, Treasuries are the senior most assets on US bank balance sheets).
I cannot say when this will happen. But it will happen. It might be next week, next month, or several years from now. But we've crossed the point of no return. The Treasury market is almost entirely dependent on the Fed to continue to function. That alone should make it clear that we are heading for a period of systemic risk that is far greater than anything we've seen in 80+ years (including 2008).
The Fed is not a "dealer" giving "hits" of monetary morphine to an "addict"... the Fed has permitted cancerous beliefs to spread throughout the financial system. And the end result is going to be the same as that of a patient who ignores cancer and simply acts as though everything is fine.
That patient is now past the point of no return. There can be no return to health. Instead the system will eventually collapse and then be replaced by a new one.
Graham Summers
Chief Market Strategist
Phoenix Capital Research
Friday, March 16, 2012
JP Morgan Whistleblower letter to the CFTC.
The letter below was taken down by the CFTC on 3/16/2012 after it was posted 3/15/2012.
Today, the metals space is abuzz with a CFTC "comment letter" posted on its website by an alleged "current JPM employee." There is only one problem - this letter is either a complete fraud or simply a total mockery, as it provides absolutely nothing new, and merely regurgitates existing manipulation claims already out in the public domain, and backed by precisely zero evidence. How about attaching a signed trade confirm, or a daily internal P&L report, or even a blotter entry? No? Because they don't exist? Needless to say, anyone can submit such an alleged insider letter, and since there is no name associated to it, we would advise everyone to merely enjoy this a prank attempt. Unfortunately, what more such repeated faux "whistleblower letters", which are likely forthcoming, from other "current JPM employees" will do is simply dilute the effect of any real such disclosure that may come in the future. For that purpose, we strongly caution anyone who considers submitting such disinformation attempts from doing so as it will merely impair and discourage any just intent of validated and justified whistleblowing, either at JPM or elsewhere.
Full "letter" below
Dear CFTC Staff,
Hello, I am a current JPMorgan Chase employee. This is an open letter to all commissioners and regulators. I am emailing you today b/c I know of insider information that will be damning at best for JPMorgan Chase. I have decided to play the role of whistleblower b/c I no longer have faith and belief that what we are doing for society is bringing value to people. I am now under the opinion that we are actually putting hard working Americans unaware of what lays ahead at extreme market risk. This risk is unnecessary and will lead to wide-scale market collapse if not handled properly. With the release of Mr. Smith’s open letter to Goldman, I too would like to set the record straight for JPM as well. I have seen the disruptive behavior of superiors and no longer can say that I look up to employees at the ED/MD level here at JPM. Their smug exuberance and arrogance permeates the air just as pungently as rotting vegetables. They all know too well of the backdoor crony connections they share intimately with elected officials and with other institutions. It is apparent in everything they do, from the meager attempts to manipulate LIBOR, therefore controlling how almost all derivatives are priced to the inherit and fraudulent commodities manipulation. They too may have one day stood for something in the past in the client-employee relationship. Does anyone in today’s market really care about the protection of their client? From the ruthless and scandalous treatment of MF Global client asset funds to the excessive bonuses paid by companies with burgeoning liabilities. Yes, we at JPMorgan that are in the know are fearful of a cascading credit event being triggered in Greece as they have hidden derivatives in excess of $1 Trillion USD. We at JPMorgan own enough of these through counterparty risk and outright prop trading that our entire IB EDG space could be annihilated within a few short days. The last ten years has been market by inflexion point after inflexion point with the most notable coming in 2008 after the acquisition of Bear.
I wish to remain anonymous as of now as fear of termination mounts from what I am about to reveal. Robert Gottlieb is not my real name; however he is a trader that is involved in a lawsuit for manipulative trading while working with JPMorgan Chase. He was acquired during our Bear Stearns acquisition and is known to be the notorious person shorting in the silver future market from his trading space, along with Blythe Masters, his IB Global boss. However, with that said, we are manipulating the silver futures market and playing a smaller (but still massively manipulative) role in manipulating the gold futures market. We have a little over a 25% (give or take a percentage) position in the short market for silver futures and by your definition this denotes a larger position than for speculative purposes or for hedging and is beyond the line of manipulation.
On a side note, I do not work directly with accounts that would have been directly impacted by the MF Global fiasco but I have heard through other colleagues that we have involvement in the hiding of client assets from MF Global. This is another fraudulent effort on our part and constitutes theft. I urge you to forward that part of the investigation on to the respective authorities.
There is something else that you may find strange. During month-end December, we were all told by our managers that this was going to be a dismal year in terms of earnings and that we should not expect any bonuses or pay raises. Then come mid-late January it is made known that everyone received a pay raise and/or bonus, which is interesting b/c just a few weeks ago we were told that this was not likely and expected to be paid nothing in addition to base salary. January is right around the time we started increasing our short positions quite significantly again and this most recent crash in gold and silver during Bernanke's speech on February 29th is of notable importance, as we along with 4 other major institutions, orchestrated the violent $100 drop in Gold and subsequent drops in silver.
As regulators of the free people of this country, I ask you to uphold the most important job in the world right now. That job is judge and overseer of all that is justice in the most sensitive of commodity markets. There are many middle-income people that invest in the physical assets of silver, gold, as well as mining stocks that are being financially impacted in a negative way b/c of our unscrupulous shorts in the precious metals commodity sector. If you read the COT with intent you will find that commercials (even though we have no business being in the commercial sector, which should be reserved for companies that truly produce the metal) are net short by a long shot in not only silver, but gold.
It is rather surprising that what should be well known liabilities on our balance sheet have not erupted into wider scale scrutinization. I call all honest and courageous JPMorgan employees to step up and fight the cronyism and wide-scale manipulation by reporting the truth. We are only helping reality come to light therefore allowing a real valuation of our banking industry which will give investors a chance to properly adjust without being totally wiped out. I will be contacting a lawyer shortly about this matter, as I believe no other whistleblower at JPMorgan has come forward yet. Our deepest secrets lie within the hands of honest employees and can be revealed through honest regulators that are willing to take a look inside one of America's best kept secrets. Please do not allow this to turn into another Enron.
Kind Regards,
-The 1st Whistleblower of Many
-The 1st Whistleblower of Many
Banks Oversold, Muni Defaults Still Coming: Whitney - US Business News - CNBC
Banks Oversold, Muni Defaults Still Coming: Whitney - US Business News - CNBC: "There's been so much backroom political maneuvering to keep these cities from going bust...There's been every effort on the part of states to prevent really this tidal wave of defaults which is going to happen sooner or later," Whitney said. "If people want to tell me 'you're wrong because this hasn't played out,' stay tuned.""
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Thursday, March 15, 2012
Tuesday, March 13, 2012
Facebook- How to opt out of instant personalization and internet surf tracking
This week, Facebook introduced the “open graph,” a giant expansion of the “social graph” concept on which Facebook is built. The word “open” alone should be a tip-off that there are significant new privacy issues to weigh.
In the open graph, Facebook sees us as connected not just to other people – our friends — on Facebook, but to myriad things all over the Web. These things could be favorite bands, news outlets or restaurants.
It is a potentially powerful idea – Facebook wants to uncover all these interests and predilections and let us share them with our friends, whether we are at Facebook or somewhere else, in ways that could deepen personal connections and help us discover cool and interesting information.
But there is a price paid in privacy. Facebook deems these “connections” to interests and businesses and content to be public information — along with your name, profile picture, gender and friend list. And it intends to make them very public through new “social plugins” and “instant personalization.”
If you like the idea of broadcasting which articles, bands and restaurants you like, you are in luck. But if you would rather keep your personal preferences private, beware. The instructions on how to reverse it are below, after the jump.
Soon, Facebook users will be invited to declare “connections” while on other Web sites by using several new Facebook buttons and features, all identified by the Facebook icon, including opportunities to write comments about content on these sites. (Site developers will add them using Facebook’s new social plug-ins.)
If you click a Like button or make a comment, know that you are authorizing Facebook to publish it on your Facebook profile and in your friends’ news feeds.
Also, when Facebook friends of yours visit the same site, they may be informed about what content you recommended or added there, and you will see their activity, too. Facebook says it will not share any of your data with these sites.
If you do not want your activity to be published publicly, don’t use these Facebook features.
Facebook also wants to expand your “personal and social experience” on the Web by marrying your life on Facebook with your existence on partner Web sites — for now, limited to Windows Docs, Pandora and Yelp, but expect that list to grow.
It will let these sites use your public Facebook information — again, your name, profile picture, gender and “connections” — so they can, for example, tip you off to bands and bars that your friends recommend.
There has been some controversy about instant personalization, because Facebook has automatically opted in its more than 400 million users.
TechCrunch reports that some Google employees are so disturbed that they are unplugging from Facebook altogether by deactivating their accounts.
Facebook has been walking users through the new arrangement and related settings, including presenting them with an opportunity to opt out.
You can also reach the settings and opt-out via the Applications and Web sites page. Click “Edit Setting” beside Instant Personalization and uncheck the box on the next page beside “Allow select partners to instantly personalize their features with my public information when I first arrive on their websites.”
You can also opt out by clicking “No Thanks” in a blue Facebook bar that will appear at the top of each partner site the first time you visit.
Note that even if you opt out, your friends can still share public Facebook information about you to personalize their experiences on these sites unless you block each of their applications manually.
To do that, visit the “Applications Settings – Authorized” page and scroll down to the “External Websites” section, click “Profile” for each application and then the “Block Application” link on the top left of the profile page.
This is also a good time to double check your application privacy settings and make sure they reflect the information you are comfortable letting your friends share about you. Check or uncheck the boxes based on your preferences and save your changes.
Monday, March 12, 2012
Sunday, March 11, 2012
Friday, March 9, 2012
The Bad News Begins: Greek Q4 GDP Slide Revised Downward From -7.0% To -7.5% | ZeroHedge
The Bad News Begins: Greek Q4 GDP Slide Revised Downward From -7.0% To -7.5% | ZeroHedge:
The base assumptions of the bailout succeeding are based on Greek GDP being at -1% by the end of 2012. This would mean it would need to improve 6 fold in the next 12 months!!
'via Blog this'
The base assumptions of the bailout succeeding are based on Greek GDP being at -1% by the end of 2012. This would mean it would need to improve 6 fold in the next 12 months!!
'via Blog this'
Monday, March 5, 2012
Graham Summers prognosis on the future of our economy
You Cannot Build a Strong Economy or a Bull Market on Fudged Numbers and Lipstick
Let's say that you just spent a large sum, to the tune of several trillion Dollars, bailing out various businesses that were literally run into insolvency by shortsighted and greedy business practices.
Having spent this money, your next concern becomes avoiding popular outrage as sooner or later folks will find out that this money was practically given away and that everyone else got a raw deal.
So, at that point your primary focus must become convincing the world that your policies worked and that you did in fact save the world.
How do you do this?
1) The businesses you bailed out need to appear successful and profitable again
2) The economy you "saved" needs to look to be in recovery
This is precisely the blueprint for what the Powers That Be have followed post 2009.
Regarding the bailed out businesses, the large banks are posting great profits by writing down bonds they own (and recording this as a profit) and by lowering loss reserves.
Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported an aggregate profit of $26.3 billion in the fourth quarter of 2011, a $4.9 billion improvement from the $21.4 billion in net income the industry reported in the fourth quarter of 2010. This is the 10th consecutive quarter that earnings have registered a year-over-year increase. As has been the case in each of the past nine quarters, lower provisions for loan losses were responsible for most of the year-over-year improvement in earnings...
Fourth-quarter loss provisions totaled $19.5 billion, about 40 percent less than the $32.7 billion that insured institutions set aside for losses in the fourth quarter of 2010. Net operating revenue (net interest income plus total noninterest income) was $3.8 billion (2.3 percent) lower than a year earlier, due to a $4.4 billion (7.4 percent) decline in noninterest income.
Nevermind that most of these profits are illusory and that the policies used to create them (not thinking ahead but focusing on the near-term) are precisely what caused the 2008 Crisis. As long as headlines ready "great profits" all will be well.
Then of course there's General Motors, the other bailout darling.
GM's Crowded Truck Stop
A year ago today analysts rained on General Motors' parade. Wall Street's finest pointed out that GM's strong February 2011 sales were boosted by extremely generous incentives to customers. These turned out to be wholly unnecessary too: Japan's earthquake 10 days later wrecked competitors' supply chains. U.S. carmakers gained market share, slashing inventory and making record profits with solid pricing over the next several months.
While not wishing natural disasters on anyone, GM could use a deus ex machina of some sort this year. Not only did it lag every major carmaker last month with a mere 1.1% U.S. sales gain (fellow bankruptcy victim Chrysler notched 40%). But GM's dealer inventories are also at a post-bankruptcy record of 667,000 vehicles, up 29% versus a year ago and 59% compared to two years ago.
And it's the wrong sort of inventory to boot: With pump prices surging, GM has 116 selling days' worth of trucks gathering dust. Zero percent financing, anyone?
In this situation, GM is seeing some sales growth, though it's the worst of any major carmaker. However, what the company is really excelling at is delivering cars to dealers, in a sense, maintaining the appearance of economic growth, when in reality the cars are just sitting on the lots unsold.
Here again, the "success" is illusory in nature.
As for the other issue, (making the economy you "saved" look like it's in recovery), you've got Government bean-counters with an entire arsenal of seasonal adjustments and other accounting gimmickry to make the economy look far better off than it really is.
Case in point, the BLS claims we ADDED 243,00 jobs in January. That's an odd claim given that the BLS admits, in the very same report, that without adjustments, the US actuallyLOST 2.69 MILLION jobs in January.
This is roughly a discrepancy of 3 MILLION jobs. And this 243,000 jobs number for January also comes along with upward revisions that saw roughly 50,000 jobs added in both October and November.
So according to the BLS, the US is on the upswing again, maybe not in a HUGE way, but overall things are improving: we're adding jobs and unemployment is falling (from 8.5% to 8.3%).
In the end, both policies (making the bailed out businesses look successful and the economy strong) essentially boil down to fudging the numbers. And whether or not people fully understand these issues, most Americans have a sense that the Government is lying to them about the "success" of the 2008 bailouts and the recovery.
Put another way, most Americans know that all this talk of recovery is just putting lipstick on a pig. They know that the economic reality facing the US is in fact far worse than the numbers claim. Heck, it's the people are on unemployment, food stamps, and are unable to find jobs that know the realsituation in the US.
An equally dangerous problem is the fact that professional investors (institutions, hedge funds, traders) are investingbased on this fudged data. We've already seen how this kind of situation plays out before (2007-2008). What happens when the REAL situation in the economy and the financial system comes home to roost? What happens when Americans' retirement accounts get decimated by yet another collapse as most asset managers and financial advisors have yet to even regain their 2008 losses.
Big hint: it won't be pretty.
Make no mistake, the entire "success" of the 2008-2009 bailouts and stimulus is just a mirage. And the people simply aren't buying it. Which is why they're pulling their money from the markets en masse (investors pulled $132 billion from Us-stock based mutual funds in 2011, that's only $15 billion short of the record amount they pulled in 2008).
Thursday, March 1, 2012
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