Friday, July 29, 2011

Banks invest in Bulldozers to demolish foreclosed homes

Bank of America Corp., faced with a glut of foreclosed and abandoned houses it can't sell, has a new tool to get rid of the most decrepit ones: a bulldozer.
The biggest U.S. mortgage servicer will donate 100 foreclosed houses in the Cleveland area and in some cases contribute to their demolition in partnership with a local agency that manages blighted property. The bank has similar plans in Detroit and Chicago, with more cities to come, and Wells Fargo & Co., Citigroup Inc., JPMorgan Chase & Co. and Fannie Mae are conducting or considering their own programs.
Disposing of repossessed homes is one of the biggest headaches for lenders in the United States, where 1,679,125 houses, or 1 in every 77, were in some stage of foreclosure as of June, according to research firm RealtyTrac Inc. of Irvine. The prospect of those properties flooding the market has depressed prices and driven off buyers concerned that housing values will keep dropping.

Read more:

Wednesday, July 27, 2011

Worthless Currency Art Collection

Jeff Clark of Casey Research has created a wonderful historical "art" album which addresses the number one question which most people living in the US right now are unable to fathom: how can one's currency go from X to 0. It is impossible. It certainly can not happen to the dollar. Right? Well, as Jeff says: "History has a message for us: No fiat currency has lasted forever. Eventually, they all fail. You might suspect this happened only to third world countries. You’d be wrong. There was no discrimination as to the size or perceived stability of a nation’s economy; if the leaders abused their currency, the country paid the price." We may add one other thing: no country in the history of the world has imploded from hyperdeflation. Not one. At the point where the debt load was insurmountable and not enough cash flow was being generated to sustain it, the authorities would always find a way to step in and be the terminal source of dilutive fiat demand: from ancient Rome, to Weimar, to the collapse of the Soviet Block, to, inevitably, the unwind of the failed (neo) Keynesian model, where we are right about now. Sure, we can all come up with goalseeked theories that validate our perspective but they are all meaningless at the end. Past a given threshold debt money ceases to function as backed by the full "faith and credit" of the backstopper and is nothing but paper. Yes. Even the abstract concept of so-called "reserve" currencies. Quote Clark: "As you scroll through the currencies below, you’ll see some long-ago casualties. What’s shocking, though, is how many have occurred in our lifetime. You might count how many currencies have failed since you’ve been born." There are many more where these came from. Thousands in fact. Which brings us to the title of this post. What are all these images, which is really all they are now - fancy paperweights (no pun intended) from near and far history, worth now? Precisely.

Yugoslavia – 10 billion dinar, 1993
Zaire – 5 million zaires, 1992
Venezuela Р10,000 bolívares, 2002
Ukraine – 10,000 karbovantsiv, 1995
Turkey – 5 million lira, 1997
Russia – 10,000 rubles, 1992
Romania – 50,000 lei, 2001
Central Bank of China – 10,000 CGU, 1947
Peru – 100,000 intis, 1989
Nicaragua Р10 million córdobas, 1990
Hungary – 10 million pengo, 1945
Greece – 25,000 drachmas, 1943
Germany – 1 billion mark, 1923
Georgia – 1 million laris, 1994
France – 5 livres, 1793
Chile – 10,000 pesos, 1975
Brazil – 500 cruzeiros reais, 1993
Bosnia – 100 million dinar, 1993
Bolivia – 5 million pesos bolivianos, 1985
Belarus – 100,000 rubles, 1996
Argentina – 10,000 pesos argentinos, 1985
Angola – 500,000 kwanzas reajustados, 1995
Zimbabwe – 100 trillion dollars, 2006
Clark concludes:
So, will a similar fate befall the U.S. dollar? The common denominator that led to the downfall of each currency above was the two big Ds: Debts and Deficits.
With that in mind, consider the following:
Morgan Stanley reported in 2009 that there’s “no historical precedent” for an economy that exceeds a 250% debt-to-GDP ratio without experiencing some sort of financial crisis or high inflation. Our total debt now exceeds GDP by roughly 400%.
Investment legend Marc Faber reports that once a country’s payments on debt exceed 30% of tax revenue, the currency is “done for.” On our current path, analyst Michael Murphy projects we’ll hit that figure by October.
Peter Bernholz, the leading expert on hyperinflation, states unequivocally that “hyperinflation is caused by government budget deficits.” This year’s U.S. budget deficit will end up being $1.5 trillion, an amount never before seen in history.
Since the Federal Reserve’s creation in 1913, the dollar has lost 95% of its purchasing power. Our government leaders clearly don’t know how – or don’t wish – to keep the currency strong.
Whether the dollar goes to zero or merely becomes a second-class currency in the global arena, the possibility of the greenback being added to the above list grows every day. And this will lead to serious and painful consequences in our standard of living. While money is only one of many problems we’ll have to deal with, you can protect your assets with the one currency that can’t be debased, devalued, or destroyed by irresponsible leaders.
Because when it comes to money, worthless is not a fun word.

Monday, July 25, 2011

BBG: Singapore surpassed Tokyo as the busiest market for currency trading in Asia

More active trading of USD/Asians and selling of Major/Asians? And more trades done in Singapore now? BBG: Singapore surpassed Tokyo as the busiest market for currency trading in Asia, spurred by growth in the region's emerging markets that has led FX traders to shift more of their top staff to the city state. Singapore FX Market Committee rose to $314.2 billion in April, according to a survey published today. Average volumes in Japan's capital the same month were $277.9 billion, a survey by the Tokyo FX Market Committee showed. Banks in Singapore accounted for 5% of the global $4 trillion-a-day FX market in April 2010. On FX, GBP/USD back down below 1.6300, vs 5-wk highs above 1.6340, with EUR back near day lows, weighed by ongoing concerns in eurozone despite the deal. GBP/SGD at 1.9700-10, focus still on all time lows of 1.9400, as USD/SGD hit new lows of 1.4079 despite talks of aggressive MAS interest. Key 1.20.WL

Sunday, July 24, 2011

Fed planning for potential default

(Reuters) - The Federal Reserve is actively preparing for the possibility that the United States could default as a deadline for raising the government's $14.3 trillion borrowing limit looms, a top Fed policymaker said on Wednesday.
Charles Plosser, president of the Philadelphia Federal Reserve Bank, said the U.S. central bank 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. "We are all engaged. ... It's a very active process."
Plosser said his "gut feeling" was that President Barack Obama and Congress will come to an agreement to increase the Treasury's borrowing authority in time to avert a default on government obligations.

Wall St. Prostitution Ring involves NY's wealthiest

After 17 people were busted yesterday for running a prostitution ring that catered mostly to Wall Street clients, word is that the Brooklyn DA is considering charging the "Johns," the clients who ordered the ladies, too.
So far, only 30 people total have been charged.
But everyone expects more people to be arrested, because basically, besides how the prostitution ring worked, all the Brooklyn DA (Charles Hynes) spoke about at a press conference covered by NBC is how this case involves some of "New York's "wealthiest," most "sophisticated" and "high class" people on Wall Street.
It seems like he's dying to tell us some of these names. In a press conference yesterday, he said:
"For people like that, money is irrelevant."
"Everything was about people who have unlimited money. Instead of paying $20 for cocaine, they were paying $170 for cocaine."
Those who used credit cards - many charging $10,000 per night - are at risk. So was it worth it?

Read more:

Who owns US Government Debt?

Percentage of total U.S. debt, according to Business Insider:
  • Hong Kong: $121.9 billion (0.9 percent)
  • Caribbean banking centers: $148.3 (1 percent)
  • Taiwan: $153.4 billion (1.1 percent)
  • Brazil: $211.4 billion (1.5 percent)
  • Oil exporting countries: $229.8 billion (1.6 percent)
  • Mutual funds: $300.5 billion (2 percent)
  • Commercial banks: $301.8 billion (2.1 percent)
  • State, local and federal retirement funds: $320.9 billion (2.2 percent)
  • Money market mutual funds: $337.7 billion (2.4 percent)
  • United Kingdom: $346.5 billion (2.4 percent)
  • Private pension funds: $504.7 billion (3.5 percent)
  • State and local governments: $506.1 billion (3.5 percent)
  • Japan: $912.4 billion (6.4 percent)
  • U.S. households: $959.4 billion (6.6 percent)
  • China: $1.16 trillion (8 percent)
  • The U.S. Treasury: $1.63 trillion (11.3 percent)
  • Social Security trust fund: $2.67 trillion (19 percent)
So America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion.

GAO Fed Audit Report

GAO Fed Investigation

The U.S. Federal Reserve gave out $16.1 trillion in emergency loans

The U.S. Federal Reserve gave out $16.1 trillion in emergency loans to U.S. and foreign financial institutions between Dec. 1, 2007 and July 21, 2010, according to figures produced by the government's first-ever audit of the central bank.
Last year, the gross domestic product of the entire U.S. economy was $14.5 trillion.
Of the $16.1 trillion loaned out, $3.08 trillion went to financial institutions in the U.K., Germany, Switzerland, France and Belgium, the Government Accountability Office's (GAO) analysis shows.
Additionally, asset swap arrangements were opened with banks in the U.K., Canada, Brazil, Japan, South Korea, Norway, Mexico, Singapore and Switzerland. Twelve of those arrangements are still ongoing, having been extended through August 2012.

Full GAO report:

Court rules securities fraud only valid when transaction takes place in US

A federal district judge dismissed a securities fraud charge against Goldman Sachs yesterday on grounds that the plaintiffs hadn’t show the transaction occurred in the United States.

There were no doubt sighs of relief at Goldman. Once again, Goldman has avoided having to deal with fraud charges head-on.

The case tracked closely the one brought by the Securities and Exchange Commission last year. Basically, Goldman was accused of selling a foreign investor a stake in a collateralized debt obligation while failing to disclose it had a short position on the underlying mortgage securities.
The judge threw out the case based on a recent U.S. Supreme Court ruling that held that securities fraud laws only apply to deals that take place in the U.S. Of course, in the age of electronic communications, global financial firms and international investments it can be quite tricky to find out where a deal actually “takes place.”

President Obama absent from debt talks

First came the Biden talks. When those blew up, the Obama-Boehner talks took center stage. And when that failed, the McConnell-Reid talks looked promising. And after they faltered, the Obama-Boehner talks tried to find a new life.
Now it’s all come down to the Boehner-Reid-Pelosi-McConnell talks to solve the debt crisis. Notably absent? The president.

Read more:

Wednesday, July 20, 2011

Couple forecloses Bank of America branch

In a modern-day evocation of David’s slingshot triumph over Goliath, a couple of foreclosed homeowners in Naples, Fla., reportedly foreclosed on a Bank of America branch last week, their attorney actually having moving trucks pull up in front of a Naples branch to execute a foreclosure judgment against the bank.
What must have seemed to observers like a scene out of a parallel universe — you can see some video here — was actually the fair and logical conclusion to a situation which, the court had ruled, had an unfair and illogical start. In 2009, retired police officer Warren Nyerges and his wife, Maureen Collier, paid $165,000 cash for their 2,700 square foot home in the Golden Gate Estates subdivision, and never took a mortgage out on it. So imagine their surprise when, in February of 2010, Bank of America initiated foreclosure proceedings against them. The Nyerges hired an attorney, Todd Allen, to defend them against the wrongful foreclosure, and the bank eventually abandoned the matter.
But not before the Nyerges incurred $2,534 in attorney’s fees, which they requested informally from Bank of America multiple times before resorting to the courts, which ordered the bank to make the couple whole. When B of A still had not paid the judgment after five months of phone calls and letter writing by Allen and the Nyerges to the bank insisting that the court order be obeyed, Allen took the next step in the legal collection process, obtaining an order of foreclosure against the bank.

Read more:

Texas Adverse Possession - Man buys 330k house for $16

Thanks to a little-known Texas law, a man found an abandoned $300,000 home, moved his stuff in and filled out some paperwork. It cost him $16. Now, apparently he’s a homeowner.
On June 17, Kenneth Robinson moved into a $330,000 home in an upscale neighborhood in Flower Mound, Texas. Except, instead of going through a bank, wading through the mortgage process and making a down payment, Robinson went to the Denton County Courthouse and filled out a form. The house he was after was abandoned, and the mortgage company went out of business. So after months of research, Robinson took advantage of a Texas law called “adverse possession.” All he had to do was print out an online form and for a $16 fee was granted rights to the house.

Read more:

Tuesday, July 19, 2011

Soros’s Quantum Holding 75% Cash Leads Hedge Funds Baffled by Instability

Keith Anderson, who runs the $25.5 billion Quantum Endowment Fund for Soros Fund Management LLC, has seen enough of choppy global markets.
In mid-June, Anderson told his portfolio managers to pull back on trades as the hedge fund’s losses hit 6 percent for the year, according to two people familiar with the New York-based firm. As a result, the fund is about 75 percent in cash as it waits for better opportunities, said the people, who asked not to be identified because the firm is private.
Soros and Moore Capital Management LLC are among hedge funds that have reduced the amount of money they’re investing in stock, bond and currency markets as they look for clarity on global events ranging from the debt crisis in Europe to China’s efforts to control inflation to the debate over the U.S. debt ceiling. About 18 percent of asset allocators, including hedge funds, are overweight cash, the highest level in a year and up from 6 percent in May, a Bank of America Corp. survey showed last month.

EU approaches resolution as Aug 2 Deadline looms for US

The euro rallied against the dollar and rose from almost a record low versus the Swiss franc on bets European officials are approaching an agreement over measures designed to contain the region’s sovereign-debt crisis.
The 17-nation currency pared gains as Germany’s Chancellor Angela Merkel told reporters in Hanover that the debt crisis can’t be resolved “in one step.” Sweden’s krona and Australia’s dollar climbed amid renewed investor appetite for higher-yielding assets as Greek Finance Minister Evangelos Venizelos said a resolution of debt turmoil is attainable. The Canadian dollar rose after the central bank’s policy statement.

Friday, July 8, 2011

Federal Reserve Virginia Facility revealed

Insight on Friday's EUR/USD move

More on the EUR/USD move higher, and despite all the wide ranging reasons behind why the currency pair has gone completely against its positive correlation with the equity indices, the over-riding factor is that a large Asian name was a big buyer of from the low 1.4200's. Having taken out stops through the Thursday lows, the familiar trading account emerged and bought up the pair in some pretty hefty amounts. Whatever the views on how and where the employment stats would impact, there is no disputing that the above is the key factor in this afternoon's (eventual) move. The Asian account holds a large 1.40/1.47 DNT structure, which is set to roll off inside the next 2 weeks, and is choosing to 'smooth' FX moves when we get anywhere near the outer limits of the range. For now, we see expiries at 1.4330, 1.4335 and 1.4340 keeping trade up at these levels. SM

Thursday, July 7, 2011

Chained CPI to save $300 Billion over 10 years

What is “chained CPI,” and why should you care?

One proposal in the budget talks that is getting a serious look from all sides would switch the government’s way of measuring inflation and delivering a big impact on tax, spending, and entitlement programs.
How big? It could save roughly $300 billion over 10 years. That big.

Wednesday, July 6, 2011

Christopher Pettengill pleaded guilty $190 Million Forex Fraud closing case (Source: FBI) MINNEAPOLIS—Earlier today in federal court, a 54-year-old Plymouth man pleaded guilty to lending credibility to and ultimately persuading others to invest in a multi-milliondollar Ponzi scheme orchestrated by Trevor Cook. Christopher Pettengill pleaded guilty to one count of securities fraud, one count of conspiracy to commit wire fraud, and one count of money laundering. Pettengill, was who charged on June 13, 2011, entered his plea before United States District Court Chief Judge Michael J. Davis. ​Trevor Cook pleaded guilty today in federal court to leading a $190-million Ponzi schemebased in part out of the Van Dusen mansion in Minneapolis that obliterated the investments of at least 1,000 victims while he lived high on the hog and paid off gambling debts. 

Minneapolis money manager Trevor Cook admits to $190 million scam

EES Analysis markets update

Markets lack direction mid-NY session.  Hourly Bollinger signals a long for EUR/USD / reversal to fibo 1.4350/ 1.4380/1.44 though news from Europe may keep EUR offered throughout the week.  USD/CHF near all time lows @ .8300 -JG

Friday, July 1, 2011

The 25 Best Hedge Funds Of Q2 2011

Based on our calculations here are the 25 best hedge funds of second quarter:

FundNo. StocksQ2 Return
Corriente Advisors317.7%
Hawkshaw Capital Management414.0%
LaGrange Capital813.4%
Manatuck Hill Partners1012.6%
Lane Five Capital611.5%
Icahn Capital LP910.4%
Criterion Capital89.8%
Accipiter Capital Management89.4%
OrbiMed Advisors388.7%
Arrow Capital Management98.4%
Solus Alternative Asset Mgmt.48.1%
Akre Capital Management137.3%
White Elm Capital87.2%
Silver Capital Management LLC117.0%
Halcyon Asset Management26.9%
Amber Capital66.8%
JANA Partners96.7%
ValueAct Capital96.5%
Visium Asset Management676.5%
Scout Capital Management106.2%
Gates Capital Management106.1%
Healthcor Management LP256.0%
MHR Fund Management16.0%
Brencourt Advisors105.9%
Trian Partners65.8%

Read more:

Internal Latency Checker - DPC

If any kernel-mode device driver in your Windows system is implemented improperly and causes excessive latencies of Deferred Procedure Calls (DPCs) then probably drop-outs will occur when you use real-time audio or video streaming applications. For an explanation of this effect see Background information below.

The DPC Latency Checker tool determines the maximum DPC latency that occurs on your Windows system and thus enables you to check the real-time capabilities of your computer. DPC Latency Checker works independent of any external hardware. Using this tool may be helpful in the following situations:
  • You experience interruptions (drop-outs) in a flow of data processed in real-time, for example an audio stream, video stream or a sequence of measuring data, and you want to find out the reason for this problem.
  • You want to verify that your Windows system is configured properly so that it is capable of handling real-time data transfer before you install the corresponding streaming application.
  • You want to check if a particular computer system is suitable for streaming applications, for example before you buy this system.