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David DeGraw "Countdown to Rebellion" Presenting Bank Of America's Latest Product Offering To Hedge Funds: The Definitive Shorts Terminator | zero hedge. Now that traditional alpha generation is long dead courtesy of central planning, and even levered beta no longer works as a strategy at least until such time as Benny and the Inkjets return with a whole printer cartridge full of goodies for the uberwealthy, and that old "sophisticated investor" go-to staple - insider trading - is no longer an option courtesy of the clamp down on "expert insider information leaking networks", what is a hedge fund to do to justify ridiculous terms such as 2 and 20 (or 3 and 45 in some soon to be Wall Street criminal folklore cases)?
Simple: run, don't walk to Bank of America Merrill Lynch Countrywide and demand an immediate, if not sooner, hook up to the "Securities Lending GM Portal Locate System (SLGPLS). " Why the SLGPLS? Because it is the last remaining way to make money: isolate companies with large short interest and create a major covering spree. Easiest way to make money: buy all the HTB names and tell your neighbor to do the same. H/t D.S. Bank of America Proposes To Cut Outstanding Mortgages In Exchange For Broad Legal Settlement Deal. As had been rumored over the past few weeks, the WSJ reports that Bank of America is actively pursuing a deal in which it would get "broad release" from legal claims against the lender (which if provisioned properly and in their full amount will destroy the bank) in exchange for cutting the amounts owed by borrowers. The bank is "discussing the proposal with state and federal officials who are prodding the country's biggest banks toward a multibillion-dollar deal to atone for foreclosure errors…As the discussions dragged on past the mid-June target set by U.S. officials, Bank of America began pressing officials for a speedy resolution, and it put forward its principal reduction proposal in one-on-one talks with state and federal officials.
Meanwhile, negotiations continue with the banks as a group…Bank of America has told officials it wants protection against future litigation relating to mortgage servicing, said people familiar with the situation. H/t Manal. 85% Of Bank Of America's "Net Income" Comes From Reserve Release And MSR Adjustment, Capitalization Ratios Plunge | zero hedge.
Another horrendous quarter for Bank of America. While the company reported an adjusted EPS of $0.33 which shockingly came at the "at the high end of the prior guidance on June 29, 2011 when the company said net income excluding mortgage items and other selected items would be between $0.28 and $0.33 per share" the truth is that of the $5.6 billion in adjusted pretax net income, $3.3 billion was the result of credit loss releases. In other words 59% of the firm's "adjusted EPS" came from an accounting treatment and the CFO's interpretation of improving credit trends. As for the balance: another $1.5 billion came from a write-down in Mortgage Servicing Rights or another accounting gimmick. So take away the reserve release and MSRs, and one gets an EPS number that is 86% lower than the disclosed or about $0.05. Note the reserve release contribution to Adjusted EPS: Litigation expense: no comment necessary: All of the above means cash is whooshing out of the front door.
Full release: Bank of America Tumbles To Paulson's Cost Basis Following Report Bank Will Need $50 Billion More In Capital Cushion | zero hedge. A few days ago when we demonstrated the most recent bond issuance by Bank of America in which the firm issued $2.5 billion in new bonds, we said "BAC is largely underreserved for a settlement of this size which means its Tier 1 capital ratio will likely be impacted due to a major outflow of cash.
" Obviously the implication was that a capital raise is imminent. And while we were not exactly expecting the bank to access the equity capital markets (immediately), we knew cash would have to come from somewhere. Sure enough, Bank of America just issued $2.5 billion in 5 year bonds. So just when does the equity raise come? Two questions: is this funding simply to replenish the cash to have a decent Tier 1 ratio, or is the bank merely preparing for a waterfall of litigation now that the seal has been broken? " Other highlights: The only catalyst that can stop the rout in financials at this point: QE3. Got Bank Of America CDS? New York AG Says BAC's $8.5 Billion Settlement Is "Unfair and Misleading"; BAC Equity Offering Imminent.
When we last looked at the Bank of America joke of a "non-settlement" settlement for a paltry $8.5 billion when $424 billion in total misrepresented (530 in total) Countrywide mortgage trusts were at stake, we said, "we are confident that the legal process will prevail and that the presiding judge on this case, and if not him then certainly the New York District Attorney, will step up and demand a thorough reevaluation of the settlement process. " We were, oddly enough, correct. According to a just released filing from the New York Attorney General Eric Schneiderman, Bank of America (and Bank of New York Mellon, one of the tri-party repo banks mind you), violated New York state law and "misled investors.
" In a knock out punch to Bank of America (and Brian Lin who was profiled here previously), the bank allegedly violated the New York’s Martin Act and misled investors about its conduct tied to mortgage securitization as Bloomberg summarizes. From the suit: Full filing: h/t Manal Mehta. Board of Directors - Bank of International Settlements. Corruption? | Foreclosure Fraud Investigators Forced Out at Pam Bondi's Office | zero hedge. Hello all. This is how scary it is in Florida. The only investigators in the entire state that were actually doing something to protect Florida homeowners are now gone… We have been waiting for this story to break in the press before we discussed it. Now that it is out we will be providing more details on what went down here. These women worked on these investigations intensely for over a year but shortly after Bondi came into office, they were fired… More to come, but for now, from the Palm Beach Post… Foreclosure fraud investigators forced out at attorney general’s office By Kimberly Miller A lead foreclosure fraud investigator for the state said she and a colleague were forced to resign from the Florida attorney general’s office, unexpectedly ending their nearly yearlong pursuit to hold law firms and banks accountable.
Despite positive performance evaluations, Edwards said the two were told during a meeting with their supervisor in late May to give up their jobs voluntarily or be let go. Endgame: When Debt Is Fraud, Debt Forgiveness Is The Last And Only Remedy. Submitted by Charles Hugh-Smith from Of Two Minds. Today I present an important guest essay by long-time contributor Zeus Yiamouyiannis, who suggests that when debt is essentially fraudulent, then debt forgiveness is both the logical and the only remedy. Endgame: When Debt is Fraud, Debt Forgiveness is the Last and Only Remedy, by Zeus Yiamouyiannis, Ph.D., copyright 2011. Introduction Finally serious economists are considering a position I have been maintaining and writing about since the 2008 financial meltdown. Whatever its name— erasure, repudiation, abolishment, cancellation, jubilee—debt forgiveness, will have to eventually emerge forefront in global efforts to solve an ongoing systemic financial crisis.
“On a grand scale the only way to erase counterfeit money and (counterfeit) assets of hundreds of trillions of dollars is to erase the debts associated with those fake assets. Debt forgiveness, therefore, accomplishes two important things. The unsustainable nature of debt Bankers: Regulators Investigate Banks For Lying About Investor Interest In European Bond Market | zero hedge. A year ago we discovered that several European countries only managed to squeeze into the Eurozone by misrepresenting their total debt courtesy of Goldman Sachs facilitated currency swaps which misrepresented the true state of said countries' finances.
Yesterday it was revealed that at least one Spanish region had been openly lying about its economic performance and underrepresented its budget deficit by about 50%. Today we go deeper into the rabbit hole, after a WSJ report discloses that European banks 'may' have been openly and frequently lying by misrepresenting to others about the amount of third party demand at any given bond auction. Think of it as the same BS that a bulge bracket bank in the US will use to sucker retail momo investors into a hot IPO. "A European self-regulatory body is looking at whether that perennial optimism might have at times been misleading for investors in the European debt markets, according to people familiar with the matter. From the WSJ: #IMF Public #Debt Sustainability: SM/09/274 November 12, 2009 « OpESR Actions. A lawsuit filed has... "Not interested." @BenBernanke OpESR Wiki Page. Bernanke Employs a Modified 'Pump and Dump' | zero hedge.
Even Ben Bernanke Admits that Gold Is the Ultimate Safe Haven | zero hedge. Bernanke Gets Hammered, Tells Truth About US Economy. Yes, this is from the Onion. But in this surreal, centrally planned by none other than Ben Bernanke reality, the mirror in mirror effect is extremely disturbing. Drunken Ben Bernanke Tells Everyone At Neighborhood Bar How Screwed U.S. Economy Really Is SEWARD, NE—Claiming he wasn't afraid to let everyone in attendance know about "the real mess we're in," Federal Reserve chairman Ben Bernanke reportedly got drunk Tuesday and told everyone at Elwood's Corner Tavern about how absolutely fucked the U.S. economy actually is. Bernanke, who sources confirmed was "totally sloshed," arrived at the drinking establishment at approximately 5:30 p.m., ensconced himself upon a bar stool, and consumed several bottles of Miller High Life and a half-dozen shots of whiskey while loudly proclaiming to any patron who would listen that the economic outlook was "pretty goddamned awful if you want the God's honest truth.
" Continue reading here... Why Bernanke And Pals Will Soon Need a New Pair of Pants | zero hedge. The Biggest Fed Money Pump Since Lehman Went Under... | zero hedge. Joint Statement By The Fed, The FDIC, NCUA And OCC. Presenting the joint statement by The Fed, the FDIC, NCUA, OCC. In essence: the Fed tells S&P to go fornicate itself. And for your corresponding pleasure, below are the media contact of note: Federal Reserve Susan Stawick (202) 452-2955; FDIC David Barr (202) 898-6992; NCUA David Small (703) 518-6336; OCC Bryan Hubbard (202) 874-5307 Full release: Board of Governors of the Federal Reserve SystemFederal Deposit Insurance CorporationNational Credit Union AdministrationOffice of the Comptroller of the Currency Agencies Issue Guidance on Federal Debt Earlier today, Standard & Poor’s rating agency lowered the long-term rating of the U.S. government and federal agencies from AAA to AA+.
For risk-based capital purposes, the risk weights for Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities will not change. Media Contacts: Fed Minutes Released: "Some FOMC Members Think QE3 Would Be Appropriate" | zero hedge. Fed Preparing For US Default Says Plosser | zero hedge. That giant whooshing, and humming, sound you hear are all the printers at the basement of Marriner Eccles getting refills and start the warm up process. Because according to the Fed Charles Plosser the Federal Reserve is actively preparing for the possibility that the United States could default. Which can only mean one thing: an immediate paradrop of millions of $100 bricks to every man woman and child in the US since as we all know by know Tim Geithner has repeatedly confirmed the Treasury has absolutely no default plans. None. Per Reuters: Philadelphia Federal Reserve Bank President Charles Plosser said the Fed has for the past few months been working closely with Treasury, ironing out what to do if the world's biggest economy runs out of cash on August 2.
"We are in contingency planning mode," Plosser told Reuters in an interview at the regional central bank's headquarters in Philadelphia. And in addition to the warming up, the Fed is also engaging in the following: The Fed and ECB's Fatal Mistakes Will Cost Us Dearly. The great currency collapse is now charging full steam ahead. Europe is now finding itself in the unappealing position of having wasted hundreds of billions of Euros on bailing out a minor player (Greece) only to now face debt Crises from two countries (Spain and Italy) that it can’t possibly bail out. This is why the entire Greek bailout concept was so terrible to begin with. If you’re going to be facing a sovereign debt crisis and need to insure stability in the region, why bother shooting all your ammo at a minor player?
The EU would have been much better off kicking Greece out (not to mention the Greeks want out anyway), and kept some dry powder to confront the REAL problems (Spain and Italy). The same goes for the Fed in the US. As a result of this, they’ve now shown that QE really doesn’t accomplish anything (the economy took a nose dive in a BIG way in 1Q11). When this happens, the result will make the 2008 Crisis look like a joke. This report is 100% FREE. Good Investing! PS. We're At the End Game For Fed Intervention. The Fed cannot and will not announce QE 3 barring a market bloodbath or major failing. It certainly won’t announce QE 3 when commodities prices never really cooled down from their QE 2 highs. Commodities as a whole are only 8% off their QE 2 highs. Some commodities are actually higher than during QE 2. If the Fed were to announce QE 3 in this environment is would KILL the US Dollar and the US consumer.
End of story. So instead, the Fed is engaging in verbal interventions, trotting out guys like Evans who, if he were a Doctor, would be in jail for malpractice. After all, why announce QE 3 when you can get the exact same impact just from speaking in public? So if you’re banking on QE 3 coming in September, you’re in for a rude surprise. The Fed has already gone too far with QE. Folks, we’ve already crossed the Rubicon on Fed intervention. This is the facts of the matter.
Indeed, I fully believe we are about to enter into the next leg down for this Crisis. Good Investing! Graham Summers PS. More Q3 GDP Tremmors After Industrial Production And Capacity Utilization Both Miss | zero hedge. The latest June economic datapoints in the form of Industrial Production and Capacity Utilization confirm the weakness is far more than just a soft patch: IP was up 0.2%, missing expectations of 0.3%, with the prior now having been revised to negative 0.1% from up 0.1%.
Capacity Utilization was unchanged at 76.7% on expectations of a rise to 76.9%: this is what happens when the economy is still struggling with an inventory hoarding glut. And with inventories continuing to rise and being the only silver lining, expect these indicator to post further weakness well into Q3. Naturally, Japan is to blame once again: "In the second quarter, supply chain disruptions following the earthquake in Japan curtailed the production of motor vehicles and parts and restrained output in related industries; the production index for overall manufacturing was little changed for the quarter.
" We keep waiting for that auto production-driven renaissance. And waiting... And some more on utilization: It Begins: JPMorgan Lowers Q3 GDP | zero hedge. By now it is no secret that Q2 GDP is a complete scratch, likely coming at under 2%, meaning that the economy contracted in real terms (even though back in January every Wall Street economist expected a 4% growth rate at this point). Needless to say, those who have been reading Zero Hedge know that Q3 and Q4 will suffer the same fate. Everyone else who has been holding out in hope that some mythical and mysterious car buying force will appear out of somewhere and can now relax.
It isn't. Here is the first official Q3 GDP downgrade, courtesy of JPM's Michael Feroli. We fully expect every other clueless Wall Street lemming to follow suit in minutes. Read em and weep: We are revising down our projection for the growth rate of real GDP in Q3 from 3.0% to 2.5%. JP Morgan Cuts Q3 GDP To 1.5% From 2.5%, Sees Unemployment Rate At 8.9% By End Of 2012. Jefferson Parish to get share of JPMorgan deal. Here Is The Reason For JPM's Negligible Litigation Reserve: You | zero hedge. QE3 Levitation Day 3... Brings the DJIA To Positive For The Year, In Comic Contrast With The Rest Of The World. JP Morgan: "Fiscal Policy Will Cut Our 2.7% 2012 GDP Forecast To Sub 1%" JPMorgan Warns Of An Even More Disappointing Non Farm Payroll Number This Friday. Empire Manufacturing Kicks Off Weak Q3 GDP, CPI Lower Than Expected On Gas Price Drop As Core Price Increase Continues | zero hedge. IEA Joins Fed In Making Failure Into Policy: Says Additional SPR Releases Possible | zero hedge.
Hilsenrath: Fed's Kohn Says Will Give "Very Serious Consideration" To QE3. Ampedstatus Youtube Channel. Operation Empire State Rebellion. Xtatic. A little favor??? OpESR. #OpESR IRC (Widget) 12.21.2012 11:11 Expect Us. Project Mayhem 2012: The End of Fear. #pm2012. Operation Pulse (@OpShocked)... Innovation: Operation Radar : #OpRadar. Innovation: Operation Pulse : #OpPulse. Innovation: Operation Shadow : #OpShadow.
Innovation: Operation Shield : #OpShield.