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Wall St. risk models failed

A group of Wall Street executives released a report on Wednesday that outlined how the industry failed to foresee the financial meltdown of the last year and what companies can do to improve risk management.

http://www.nytimes.com/2008/08/07/business/07report.html?_r=1&em=&pagewanted=print&oref=slogin

In 1769, short of funds to rebuild Prussia after attacks by Russia, Sweden and Austria, Frederick the Great let aristocrats, churches and monasteries raise money by pledging their estates as security to investors. ... http://www.bloomberg.com/apps/news?pid=20601109&sid=amy5j45Oa9Ag&refer=home#

Investors' childlike demand for safety has made the financial world terribly risky. As we rebuild our broken financial system, we must not pretend that risk can be regulated or innovated away. We must demand that investors choose risks and bear consequences. We need more, and more creative, risk-taking, not false promises of safety that taxpayers will inevitably be called upon to keep. ... http://www.nakedcapitalism.com/2008/08/too-much-risk.html

NY and Less-Talented in trouble

"I'm worried by what's coming," he said gloomily. "But this is an opportunity for the talented to get ahead. The less talented will be weeded out."

"I'm worried by what's coming," he said gloomily. "But this is an opportunity for the talented to get ahead. The less talented will be weeded out."

http://www.breitbart.com/article.php?id=080804143812.o8igyxho&show_article=1

Wealthy hit by crunch

http://wcbstv.com/topstories/Wealthy.Spending.Down.2.786657.html

Wealthy Begin Feeling The Pain In Down Economy-Less Money Allocated For Luxury Goods, Investments And Credit Cards Are Signs That Rich, Too, Getting Squeezed

IS THE U.S. BANKING SYSTEM SAFE?

http://www.nolanchart.com/article4339.html ...!!! There is only $274 billion of the $6.84 trillion as cash on hand at banks.

http://www.marketoracle.co.uk/Article5733.html ...Green Mountains loom above the still waters. A loon calls from the next lake over. Who would guess that that not far from such serenity the world's most powerful nation was teetering on the brink of disaster? Though here in the bosom of nature one wonders why we should be surprised. Nations and empires come and then they go.

Instead, the hidden idea behind the euro was to literally force the creation of other regional currencies throughout the world.... http://www.marketoracle.co.uk/Article5725.html

Reality is now breaking through the delusion. Some people respond by closing their minds and asserting that the market will come back, "because it always does.".... http://www.larouchepub.com/other/2002/2929two_yrs_crsh.html

http://www.businessspectator.com.au/bs.nsf/Article/NAB-will-shock-Wall-Street-GV4M7?OpenDocument&src=stf

This isn't a "sale"; it's more like abandoning a sinking ship. The investment chieftains are getting scorched by their downgraded assets and have started dumping them at any cost. There's no market for mortgage-backed anything now, and there won't be until housing finds a bottom. By the time that happens, most of the CEOs and CFOs in the mega-brokerage houses will be squatting on street corners on the lower East Side with tin cup in hand. It's that bad... http://onlinejournal.com/artman/publish/printer_3571.shtml

Reality is now breaking through the delusion. Some people respond by closing their minds and asserting that the market will come back, "because it always does.".... http://www.larouchepub.com/other/2002/2929two_yrs_crsh.html

Disasters are hardly unique to our time. Periodic drought, flood, wildfire, recession, boom-and-bust cycles, famine, wars and rumors of wars, earthquakes, volcanic eruptions, tsunamis, tornadoes, hurricanes—all have darkened the human experience for generations.

Yet something unique in this tired old world's history is now occurring. The realists within our society, the real thinkers, those who deeply consider just what is going on upon planet Earth, are taking notice. All of a sudden, there appears to be a confluence of numerous catastrophes that are affecting not just one or two nations here and there, but the entire global system. .... http://www.thetrumpet.com/print.php?q=5377.0.107.0

EUOBSERVER / COMMENT - Anybody who believes the Eurozone is immune to the havoc created in the Anglo-Saxon economies by the credit crunch would do well to look again. Recent figures suggest the outlook for the EU-15 is poor - and if one factors in weakness of the Eurozone's economic governance, the outlook is positively grim. ... http://euobserver.com/9/26571?print=1

Regional banks are going to fall by the dozen before this is over. And some of the very largest banks will be taken over or go bankrupt. The financial sector needs to shrink because a lot of its business is gone and it's never going to come back. If the airline industry has too few passengers we see airlines going out of business. The Federal Reserve seems to have this picture that they can engineer things so that all the financial firms will shrink by fifteen percent. That's not the way a capitalistic system works. http://www.welt.de/wirtschaft/arti2258238/American_economy_will_become_more_European.html

SO ALAN GREENSPAN – former chairman of the Federal Reserve – thinks this equals the Great Crash, if not out-bads it.

"It's getting increasingly evident that this is a once-in-a-century type of phenomenon," http://news.goldseek.com/GoldSeek/1217609460.php

On Friday, British Airways, announcing an 88% plunge in profits, blamed the collapse on the "worst trading environment" the aviation industry has ever experienced.

http://business.scotsman.com/economics/Bill-Jamieson-We-need-a.4352281.jp

http://www.elliottwave.com/freeupdates/archives/2008/08/01/The-Biggest-Financial-Shoe-Drops-Consumer-Spending.aspx

Mark your calendars. The crash of the U.S. economy has begun. It was announced the morning of Wednesday, June 13, 2007, by economic writers Steven Pearlstein and Robert Samuelson in the pages of the Washington Post, one of the foremost house organs of the U.S. monetary elite. t's official. Mark your calendars. The crash of the U.S. economy has begun. It was announced the morning of Wednesday, June 13, 2007, by economic writers Steven Pearlstein and Robert Samuelson in the pages of the Washington Post, one of the foremost house organs of the U.S. monetary elite.

http://www.globalresearch.ca/index.php?context=va&aid=5964

Depression and realistic economic numbers from alternative sources

http://www.globalresearch.ca/index.php?context=va&aid=9596 What is really taking place, however, is that the producing economy of working men and women is being crushed by the overall debt burden on households, businesses, and governments that could reach $70 trillion by 2010. The financial system, including mortgage giants Fannie Mae and Freddie Mac, is bankrupt, as the debts it is based on cannot be repaid.

www.globalresearch.ca/index.php?context=va&aid=9162 Economic depression in America: Evidence of a withering economy is everywhere

http://www.shadowstats.com/ Shadow Government Statistics

Financial collapse – Legislation + market meltdown

http://www.alternet.org/workplace/93509/america's_economic_free_fall/ ...The same legislation also repealed the federal law prohibiting usury -- the predatory practices that ruin debtors of modest means by lending on terms that ensure borrowers will fail. Usurious lending is now commonplace in America, from credit cards and "payday loans" to the notorious subprime mortgages.

http://www.financialsense.com/Market/wrapup.htm 200 day MA indicates market collapse

http://www.investigatethesec.com/drupal-5.5/node/350
The Federal Reserve Bank of New York expanded efforts to clean up trading in the privately negotiated derivatives markets to include contracts linked to interest rates, commodities and currencies.

JPMorgan Chase & Co., Goldman Sachs Group Inc. and 15 other banks committed to speed up processing and reduce errors in the $454 trillion over-the-counter derivatives market by putting more trading onto electronic platforms and improving the market's infrastructure, the New York Fed said today in a statement. They also committed to start clearing by yearend some credit-default swap trades through a central counterparty that could absorb the failure of a market-maker.

Merrill `Co-Opted' Analysts Backed Auction-Rate Debt

http://www.bloomberg.com/apps/news?pid=20601087&sid=aH7fMLO4eagk&refer=home# Aug. 1 (Bloomberg) -- Four days before Merrill Lynch & Co. stopped supporting the auction-rate securities market and left thousands of individual investors stuck with securities they couldn't sell, the firm's analysts recommended clients buy.

``Reports of the imminent demise of the auction market seem to be greatly exaggerated, again,'' analyst Kevin Conery wrote in a Feb. 8 research note. ``We continue to be impressed by the auction market's resiliency.''

The remarks show Merrill's researchers were ``co-opted'' during a seven-month drive by the New York-based firm's sales force to prevent a meltdown in the $330 billion market, Massachusetts Secretary of State William Galvin alleged yesterday in an administrative complaint filed in Boston. As the sales desk pushed analysts to publish upbeat notes, managers used gallows humor to complain about a ``collapsing'' market and the end of $2,000 dinners.

``Come on down and visit us in the vomitorium!!'' the auction-rate desk's managing director, Frances Constable, wrote to a co-worker in August, as demand began to dry up. ``Market is collapsing,'' another executive cited in Galvin's complaint said in a November 2007 personal e-mail. ``No more $2K dinners at CRU,'' a Manhattan restaurant where the wine list includes dozens of bottles for more than $1,000.

Bank losses shame disgruntled Swiss

http://news.bbc.co.uk/2/hi/business/7532251.stm

Bank losses shame disgruntled Swiss

 

In Zurich's central square trams rumble past the tourist stalls doing a gentle trade in Swiss souvenirs.

But while local chocolate, miniature cuckoo clocks and pen knives are still proving popular in the summer sunshine, another icon of Swiss identity is desperately trying to hold onto its good name.

Paulson suggests covered bonds

http://www.reuters.com/article/newsOne/idUSWEQ00007020080728
WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson said the nation's four biggest banks were ready to kick-start a market for covered bonds that could help significantly expand home mortgage financing.

"I believe covered bonds have the potential to increase mortgage financing, improve underwriting standards and strengthen U.S. financial institutions by providing a new funding source," Paulson said in prepared remarks for a press conference on Monday.

Covered bonds, issued by banks and secured by pools of assets like home loans, are widely used in Europe but have only become attractive in the United States since the segment of the mortgage securitization market driven by investment banks dried up last year amid a wave of foreclosures.

http://www.portfolio.com/views/blogs/market-movers/2008/07/08/what-is-a-covered-bond Covered Bonds Explained

http://en.wikipedia.org/wiki/Covered_bonds

http://europe.pimco.com/LeftNav/Bond+Basics/2006/Covered+Bond+Basics.htm Pimco explains covered bonds

http://www.iht.com/articles/2007/11/22/bloomberg/bxloan.php German banks agreed Thursday to suspend trading in pfandbrief mortgage bonds to "calm down" the market following a slump that has shut down trading in the securities, which are the biggest source of funds for home lenders in Europe.

The Association of German Pfandbrief Banks, an industry group that represents securities firms and borrowers in the $1.3 trillion German market, was following advice Wednesday from the European Covered Bond Council to withdraw from interbank trading until Nov. 26.

 

 

 

Cuil debuts

Ex-Google engineers debut 'Cuil' way to search www.cuil.com

By MICHAEL LIEDTKE – 4 hours ago

SAN FRANCISCO (AP) — Anna Patterson's last Internet search engine was so impressive that industry leader Google Inc. bought the technology in 2004 to upgrade its own system.

She believes her latest invention is even more valuable — only this time it's not for sale.

Patterson instead intends to upstage Google, which she quit in 2006 to develop a more comprehensive and efficient way to scour the Internet.

The end result is Cuil, pronounced "cool." Backed by $33 million in venture capital, the search engine plans to begin processing requests for the first time Monday.

Cuil had kept a low profile while Patterson, her husband, Tom Costello, and two other former Google engineers — Russell Power and Louis Monier — searched for better ways to search.

Now, it's boasting time.

For starters, Cuil's search index spans 120 billion Web pages.

Patterson believes that's at least three times the size of Google's index, although there is no way to know for certain. Google stopped publicly quantifying its index's breadth nearly three years ago when the catalog spanned 8.2 billion Web pages.

Cuil won't divulge the formula it has developed to cover a wider swath of the Web with far fewer computers than Google. And Google isn't ceding the point: Spokeswoman Katie Watson said her company still believes its index is the largest.

After getting inquiries about Cuil, Google asserted on its blog Friday that it regularly scans through 1 trillion unique Web links. But Google said it doesn't index them all because they either point to similar content or would diminish the quality of its search results in some other way. The posting didn't quantify the size of Google's index.

A search index's scope is important because information, pictures and content can't be found unless they're stored in a database. But Cuil believes it will outshine Google in several other ways, including its method for identifying and displaying pertinent results.

Rather than trying to mimic Google's method of ranking the quantity and quality of links to Web sites, Patterson says Cuil's technology drills into the actual content of a page. And Cuil's results will be presented in a more magazine-like format instead of just a vertical stack of Web links. Cuil's results are displayed with more photos spread horizontally across the page and include sidebars that can be clicked on to learn more about topics related to the original search request.

Finally, Cuil is hoping to attract traffic by promising not to retain information about its users' search histories or surfing patterns — something that Google does, much to the consternation of privacy watchdogs.

Cuil is just the latest in a long line of Google challengers.

The list includes swaggering startups like Teoma (whose technology became the backbone of Ask.com), Vivisimo, Snap, Mahalo and, most recently, Powerset, which was acquired by Microsoft Corp. this month.

Even after investing hundreds of millions of dollars on search, both Microsoft and Yahoo Inc. have been losing ground to Google. Through May, Google held a 62 percent share of the U.S. search market followed by Yahoo at 21 percent and Microsoft at 8.5 percent, according to comScore Inc.

Google has become so synonymous with Internet search that it may no longer matter how good Cuil or any other challenger is, said Gartner Inc. analyst Allen Weiner.

"Search has become as much about branding as anything else," Weiner said. "I doubt (Cuil) will be keeping anyone at Google awake at night."

Google welcomed Cuil to the fray with its usual mantra about its rivals. "Having great competitors is a huge benefit to us and everyone in the search space," Watson said. "It makes us all work harder, and at the end of the day our users benefit from that."

But this will be the first time that Google has battled a general-purpose search engine created by its own alumni. It probably won't be the last time, given that Google now has nearly 20,000 employees.

Patterson joined Google in 2004 after she built and sold Recall, a search index that probed old Web sites for the Internet Archive. She and Power worked on the same team at Google.

Although he also worked for Google for a short time, Monier is best known as the former chief technology officer of AltaVista, which was considered the best search engine before Google came along in 1998. Monier also helped build the search engine on eBay's online auction site.

The trio of former Googlers are teaming up with Patterson's husband, Costello, who built a once-promising search engine called Xift in the late 1990s. He later joined IBM Corp., where he worked on an "analytic engine" called WebFountain.

Costello's Irish heritage inspired Cuil's odd name. It was derived from a character named Finn McCuill in Celtic folklore.

Patterson enjoyed her time at Google, but became disenchanted with the company's approach to search. "Google has looked pretty much the same for 10 years now," she said, "and I can guarantee it will look the same a year from now."

www.cuil.com

More banks fail in Nevada

http://apnews.myway.com/article/20080726/D925G0B00.html CARSON CITY, Nev. (AP) - The 28 branches of 1st National Bank of Nevada and First Heritage Bank, operating in Nevada, Arizona and California, were closed Friday by federal regulators.

Bad news for banks

http://online.wsj.com/article/SB121672195606273245.html?mod=hps_us_whats_news Bank of America led the way with a 13.3% jump. On the year, the Dow is down 13%.

Financial stocks surged even after Wachovia and a number of regional banks posted bleak quarterly numbers. Wachovia shares soared 27.4%.

Mexico halts USD sale

http://www.reuters.com/article/bondsNews/idUSN2539033720080725 MEXICO CITY, July 25 (Reuters) - Mexico's central bank said on Friday it would suspend a daily sale of foreign reserves after the government bought $8 billion from the bank to cover foreign exchange requirements for the coming months.

Bankruptcies Soar for Small Biz

http://www.mcclatchydc.com/227/story/44717.html
WASHINGTON — Driven by a sour economy and skittish consumers, U.S. business bankruptcies saw their sharpest quarterly rise in two years, jumping 17 percent in the second quarter of 2008, according to an analysis by McClatchy.

Commercial filings for the first half of 2008 are up 45 percent from last year, as the national climate for commerce continues to deteriorate amid rising energy and food costs, mounting job losses, tighter credit and a reticence among consumers to part with discretionary income.