Showing posts with label Hank Paulson. Show all posts
Showing posts with label Hank Paulson. Show all posts
Tuesday, July 21, 2009
Friday, July 17, 2009
America's Bankrupt Banks
This is the first part of a six of an hour long show about the meltdown. If you liked this part you can find the rest the clips here. Hat tip to a Chicago for pointing these out.
Monday, July 13, 2009
The Fed Under Fire
No chart tonight, I got bogged down with some other things. Instead, I hope you'll enjoy this video about the Federal Reserve and I hope you will continue to support Dr. Paul's bill to have them audited. This is a major issue that needs to get more national attention. I found this video in this article that you might also enjoy.
Thursday, July 09, 2009
Monday, June 01, 2009
How Bernanke Rules the World (staying on the DL)
"On September 15,2008, Merrill Lynch entered into a merger agreement with Bank of America. The merger was negotiated and due diligence was conducted over the course of a tumultuous September 13-14 weekend. Time was of the essence for Merrill Lynch, as the company was not likely to survive the following week without a merger. The merger was approved by shareholders on December 5, 2008, and became effective on January 1,2009."
"The week after the shareholder vote -and days after Merrill Lynch set its bonuses Merrill Lynch quickly and quietly booked billions of dollars of additional losses. Merrill Lynch's fourth quarter 2008 losses turned out to be $7 billion worse than it had projected prior to the merger vote and finalizing its bonuses. These additional losses, some of which had become known to Bank of America executives prior to the merger vote, were not disclosed to shareholders until mid-January 2009, two weeks after the merger had closed on January 1,2009.
On Sunday, December 14,2008, Bank of America's CFO advised Ken Lewis, Bank of America's CEO, that Merrill Lynch's financial condition had seriously deteriorated at an alarming rate. Indeed, Lewis was advised that Merrill Lynch had lost several billion dollars since December 8, 2008. In six days, Merrill Lynch's projected fourth quarter losses skyrocketed from $9 billion to $12 billion, and fourth quarter losses ultimately exceeded $15 billion.
Immediately after learning on December 14,2008 of what Lewis described as the "staggering amount of deterioration" at Merrill Lynch, Lewis conferred with counsel to determine if Bank of America had grounds to rescind the merger agreement by using a clause that allowed Bank of America to exit the deal if a material adverse event ("MAC") occurred."
"Bank of America's attempt to exit the merger came to a halt on December 21, 2008. That day, Lewis informed Secretary Paulson that Bank of America still wanted to exit the merger agreement. According to Lewis, Secretary Paulson then advised Lewis that, if Bank of America invoked the MAC, its management and Board would be replaced."
"Despite the fact that Bank of America had determined that Merrill Lynch's financial condition was so grave that it justified termination of the deal pursuant to the MAC clause, Bank of America did not publicly disclose Merrill Lynch's devastating losses or the impact it would have on the merger. Nor did Bank of America disclose that it had been prepared to invoke the MAC clause and would have done so but for the intervention of the Treasury Department and the Federal Reserve.
Prior to the closing of the deal, Lewis had requested that the government provide a written agreement to provide additional TARP funding before the close of the Merrill Lynch/Bank of America merger. Secretary Paulson advised Lewis that a written agreement could not be provided without disclosure."
"On the issue of terminating management and the Board, Secretary Paulson indicated that he told Lewis that if Bank of America were to back out of the Merrill Lynch deal, the government either could or would remove the Board and management."
"Secretary Paulson's threat swayed Lewis. According to Secretary Paulson, after he stated that the management and the Board could be removed, Lewis replied, "that makes it simple. Let's deescalate." Lewis admits that Secretary Paulson's threat changed his mind about invoking that MAC clause and terminating the deal.
Secretary Paulson has informed us that he made the threat at the request of Chairman Bernanke. After the threat, the conversation between Secretary Paulson and Lewis turned to receiving additional government assistance in light of the staggering Merrill Lynch losses."
"It also bears noting that while no public disclosures were made by Bank of America, Lewis admitted that Bank of America's decision not to invoke the MAC clause harmed any shareholder with less than a three year time-horizon."
"Secretary Paulson informed this Office that he did not keep the SEC Chairman in the loop during the discussions and negotiations with Bank of America in December 2008."
So it turns out BAC is not quite as dumb as we all thought! The BAC management and board didn't want to go through with the merger, THEY WERE FORCED TO by Bernanke. The threat of loosing your job and your company is enough to get people to break SEC regulations and federal law, apparently. Will Paulson go to jail over this? Probably not, especially with Bernanke still running the show. But someone's head has got to roll and I'd bet they want it to be Lewis (he's still CEO remember). I got these from interesting quotes out of a recent letter from Andrew Cuomo to heads of the legislature.
"The week after the shareholder vote -and days after Merrill Lynch set its bonuses Merrill Lynch quickly and quietly booked billions of dollars of additional losses. Merrill Lynch's fourth quarter 2008 losses turned out to be $7 billion worse than it had projected prior to the merger vote and finalizing its bonuses. These additional losses, some of which had become known to Bank of America executives prior to the merger vote, were not disclosed to shareholders until mid-January 2009, two weeks after the merger had closed on January 1,2009.
On Sunday, December 14,2008, Bank of America's CFO advised Ken Lewis, Bank of America's CEO, that Merrill Lynch's financial condition had seriously deteriorated at an alarming rate. Indeed, Lewis was advised that Merrill Lynch had lost several billion dollars since December 8, 2008. In six days, Merrill Lynch's projected fourth quarter losses skyrocketed from $9 billion to $12 billion, and fourth quarter losses ultimately exceeded $15 billion.
Immediately after learning on December 14,2008 of what Lewis described as the "staggering amount of deterioration" at Merrill Lynch, Lewis conferred with counsel to determine if Bank of America had grounds to rescind the merger agreement by using a clause that allowed Bank of America to exit the deal if a material adverse event ("MAC") occurred."
"Bank of America's attempt to exit the merger came to a halt on December 21, 2008. That day, Lewis informed Secretary Paulson that Bank of America still wanted to exit the merger agreement. According to Lewis, Secretary Paulson then advised Lewis that, if Bank of America invoked the MAC, its management and Board would be replaced."
"Despite the fact that Bank of America had determined that Merrill Lynch's financial condition was so grave that it justified termination of the deal pursuant to the MAC clause, Bank of America did not publicly disclose Merrill Lynch's devastating losses or the impact it would have on the merger. Nor did Bank of America disclose that it had been prepared to invoke the MAC clause and would have done so but for the intervention of the Treasury Department and the Federal Reserve.
Prior to the closing of the deal, Lewis had requested that the government provide a written agreement to provide additional TARP funding before the close of the Merrill Lynch/Bank of America merger. Secretary Paulson advised Lewis that a written agreement could not be provided without disclosure."
"On the issue of terminating management and the Board, Secretary Paulson indicated that he told Lewis that if Bank of America were to back out of the Merrill Lynch deal, the government either could or would remove the Board and management."
"Secretary Paulson's threat swayed Lewis. According to Secretary Paulson, after he stated that the management and the Board could be removed, Lewis replied, "that makes it simple. Let's deescalate." Lewis admits that Secretary Paulson's threat changed his mind about invoking that MAC clause and terminating the deal.
Secretary Paulson has informed us that he made the threat at the request of Chairman Bernanke. After the threat, the conversation between Secretary Paulson and Lewis turned to receiving additional government assistance in light of the staggering Merrill Lynch losses."
"It also bears noting that while no public disclosures were made by Bank of America, Lewis admitted that Bank of America's decision not to invoke the MAC clause harmed any shareholder with less than a three year time-horizon."
"Secretary Paulson informed this Office that he did not keep the SEC Chairman in the loop during the discussions and negotiations with Bank of America in December 2008."
So it turns out BAC is not quite as dumb as we all thought! The BAC management and board didn't want to go through with the merger, THEY WERE FORCED TO by Bernanke. The threat of loosing your job and your company is enough to get people to break SEC regulations and federal law, apparently. Will Paulson go to jail over this? Probably not, especially with Bernanke still running the show. But someone's head has got to roll and I'd bet they want it to be Lewis (he's still CEO remember). I got these from interesting quotes out of a recent letter from Andrew Cuomo to heads of the legislature.
Wednesday, April 08, 2009
Tuesday, January 27, 2009
Friday, January 09, 2009
Economic Stress Relief
Squishy banker dolls are now available for economic stress relief at SqueezeTheBanker.com. The advertisers should have some fun with this one I'm thinking. The slogan could be "turn the credit crunch on the creditors" or "only $8.99, buy one before your dollars become worthless" or "if you pay taxes, Paulson put the squeeze on you, now put the squeeze on Paulson." Ah, I love the internet.
Monday, September 29, 2008
Sunday, September 07, 2008
Thursday, July 24, 2008
The Truth About Fannie and Freddie
I don't think I could be more disillusioned with our government right now. Why is there no national uproar over the fraudulent activities of our central government and the federal reserve? I think since they got away with the Bear Stearns heist they think they can do anything they want. Rather than say the same things others have said I will just quote Tim Knight over at the Slope of Hope, he writes:
"I have to say, I'm both disappointed and angry. The gigantic bailout that the Federal Government is shoving through the system creates a series of winners and losers. Specifically:
Winners
- The CEOs and other executives of FNM and FRE, all of whom pull down seven-figure and eight-figure salaries and have pulled one of the great corporate heists in business history
- The lower-middle class blockheads that gobbled up real estate at sky-high prices, thinking they would be the next Donald Trump, who are going to simply walk away from their "investments"
- The shareholders of FNM and FRE, who have been spared a $0 stock
Losers
- All the citizens of the United States, particularly those who pay taxes
- Honest, hardworking people that got mortgages through honest means, pay their payment promptly each month, and have received no help or favors from anyone (I am pointing not-so-subtly at myself right now.....)
So the honest and hardworking folks are the fools. And the charlatans and crooks are the winners. And the entire country slips that much closer into oblivion with this travesty."
So ignoring the insane and fraudulent activities of the US government for a minute, how do we protect ourselves in this environment? Obviously, you can short stocks but that makes people nervous and you must get the timing right or have nerves of steel. Jim Rogers recommends buying China and agriculture commodities and I like those ideas. It seems like the most straightforward thing to do is to buy things that will benefit from a collapsing US dollar. Generally speaking that means foreign currencies (FXE, FXA, FXY, etc) and commodities (DBC, DBA, USO, GLD, etc). Any other ideas?
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