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We are to blame for this because we failed to demand and enforce a stop to this crap of un-margined derivative exposure that is "off book" and unsupervised on a daily basis, unlike positions in the futures and stock markets. I have been calling for "pulling the fuse" on this bomb since I started The Ticker for this very reason. The banks have hundreds of trillions of "gross" exposure in these instruments and while that grossly overstates the actual risk the fact of the matter is that these institutions have not and cannot post margin against these positions as they...

In fact, U.S. stocks might be solidly in the green now if it weren’t for another development that bears watching: Weakness in financials. Monday's slide is also being attributed to Cyprus, which has revived fears of "contagion" emanating from Europe and the related counterparty risk faced by banks. But bank stocks were under pressure before the Cyprus "bail in" hit the headlines. Starting late Thursday, the financials had a really bad weekend when a Senate report found JPMorgan had misled regulators (and investors) in its disclosures surrounding the now infamous London Whale trade.

While the US Senate takes on Too-Big-To-Fail banks, other economic news hit the wires. First, the University of Michigan Survey of Consumer Confidence Sentiment fell to 71.8 and has not been above 80 last seen in 2007. Industrial production rose 0.7% in February and capacity utilization rose to 79.6%. Not quite 80%, but getting really close. But notice that the peaks of capacity utilization are falling. But the big news today was the Senate hearing on JPMorganChase and its CEO Jamie Dimon. JPMorgan Report Ignites Debate on Bank Size By Dawn Kopecki, Clea Benson and Hugh Son JPMorgan Chase &...

If you’re an amoral person with political connections, it’s possible to make a lot of money. Warren Buffett lined his pockets by making a government-subsidized investment in Goldman Sachs during the financial crisis.The rest of us suffered and he got richer, but the left seems to be okay with that perverse form of redistribution because he supports class-warfare tax hikes. Sort of like buying an indulgence in the Middle Ages.Hey, nice work if you can get it.But Buffett may be an amateur compared to the crony capitalists at Citigroup.The just-confirmed Treasury Secretary Jack Lew was given a huge bonus for...

Bartiromo Takes Frank to Task Over Lack of ’08 Financial Crisis Prosecutions • Frank: 'Individuals' should be prosecuted on Wall Street, will not say who Former Massachusetts Congressman Barney Frank (D., Mass.) advocated criminal prosecutions against “individuals” involved in the 2008 financial crisis and the subsequent collapse on Wall Street Friday on CNBC. Maria Bartiromo reacted incredulously to Frank’s refusal to name specific individuals who may have perpetrated criminal wrongdoing, accusing the former Congressman of playing populist politics by making specious allegations against the financial industry. Frank attempted to deflect the criticism by stating as Chair of House Financial Services...

The Coming Derivatives Panic That Will Destroy Global Financial Markets Stock-Markets / Financial CrashDec 05, 2012 - 04:24 AM By: John Rolls John Rolls Submits, Michael Snyder writes: When financial markets in the United States crash, so does the U.S. economy. Just remember what happened back in 2008. The financial markets crashed, the credit markets froze up, and suddenly the economy went into cardiac arrest. Well, there are very few things that could cause the financial markets to crash harder or farther than a derivatives panic. Sadly, most Americans don't even understand what derivatives are. Unlike stocks and bonds, a...

The Fiscal Cliff Is A Mole Hill Compared TAG Program Expiry Stock-Markets / Credit Crisis 2012Nov 12, 2012 - 07:24 AM By: Money Morning Shah Gilani writes: Everyone is afraid of falling off the "fiscal cliff." But there's another dangerous countdown clock about hit to zero. And no one is talking about it, even though it will spell even more financial problems for us all. At midnight on December 31, 2012, the Transaction Account Guarantee (TAG) program will expire. The TAG program was initiated at the height of the credit crisis when depositors were fleeing banks for fear they would...

We caught up with our old friend Peter Schiff at Freedom Fest. While he was on a panel, security was sicked on Doug Casey for smoking a cigar (Cubano of course) while participating on stage. Freedom took a major hit when Doug was forced to extinguish his rich stogie. But as Doug said, he was on someone else's property, so he had to comply with the management's wishes. I want to know who the Buzzkill was that turned him in. Peter made the case for limited government and eliminated socialism in his usual eloquent manner. Too Big To Fail Banks...

Every quarter the Office of the Currency Comptroller releases its report on Bank Derivative Activities, and every quarter we find that the Too Big To Fail get Too Bigger To Fail. To wit: in Q4 2011, of the total $230.8 trillion in US outstanding derivatives, the Top 5 banks (JPM, BofA, Morgan Stanley, Goldman and HSBC) accounted for 95.7% of all Derivatives. In some respects this is good news: in Q2, the Top 5 banks held 95.9% of the $250 trillion in derivatives. Unfortunately it is also bad news, because $220 trillion is more than enough for the world to...

Republican presidential candidate Newt Gingrich said Thursday that he's trying to figure out how much money he made from controversial housing giant Freddie Mac and suggested he may release the information as early as Friday. Gingrich's comments, in an interview with Fox News' Greta Van Susteren, represent the latest shift in his campaign's response to a Bloomberg News story earlier this week that said the former House speaker made as much as $1.6 million from Freddie. Initially, the Gingrich campaign promised to release details about the payment, then appeared to back off that pledge. Freddie Mac and its sister quasi-governmental...

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(RALEIGH) -- Texas Gov. Rick Perry has been in the Presidential race for barely more than a week, but Tom Jensen with Public Policy Polling said a recent round of polling in North Carolina and Colorado already ranks Perry close to deserving front runner status. "We're already finding Perry tied for the lead in both North Carolina and Colorado and these polls were conducted before he even officially entered the race," said Jensen. In North Carolina Perry is in a three way tie with Mitt Romney and Sarah Palin. Each getting 17-percent. Perry also led a poll conducted in Virginia...

The largest and most powerful financial institutions in the world all borrowed billions of dollars in emergency loans from the United States Federal Reserve during the financial crisis, totaling up to $1.2 trillion, a number that has remained secret until now. The $160 billion public bailout was "dwarfed," Bloomberg reports, by the Fed's covert lending, which included $107.3 billion to Morgan Stanley, $99.5 billion to Citigroup, and $91.4 billion to Bank of America. As one expert put it, "You’re talking about the aristocracy of American finance going down the tubes without the federal money."

Should we be surprised, frightened, disgusted or simply say "we knew it", that in the informal mixer just after Texas Governor and Republican presidential candidate Rick Perry spoke at a Politics and Eggs breakfast in Bedford, New Hampshire, an unknown gentlemen approaches a casual Perry like an Ian Flemming character, and proceeds to dead drop the following: "Bank of America... We will help you out"... and silently moves on. At least we know now who is funding what, and whose interests potential future president Perry will be paid to defend.

With the Dow Jones Industrial Average down more than 400 points today, and many market experts predicting more volatility ahead, some advisers are recommending their clients put some of their cash to another use: To buy that house or summer home at the shore. Getty ImagesPotential homebuyers certainly have plenty of incentives: Home prices are still way down in many parts of the country, and mortgage rates are nearing their all-time lows. Consider: The benchmark 30-year fixed-rate mortgage fell 1 basis point this week, to 4.45 percent — just a few basis points above the record low hit in October...

Bank of America Corp. is cutting 3,500 employees this quarter and working on restructuring plans that will ax several thousand more jobs, The Wall Street Journal and The New York Times reported citing people familiar with the situation. The reports Friday said that the job cuts at the biggest U.S. bank by assets might exceed 10,000 or about 3.5 percent of its current work force. The retrenchments are part of CEO Brian Moynihan's efforts to engineer a recovery at BoA, which was hit hard by the bursting of the housing bubble. Its share price has fallen nearly 50 percent so...

NEWS last week that the Federal Reserve would keep interest rates near zero until mid-2013 was welcomed by many investors, but the bleak message about the economy still came through loud and clear. The Fed has spent several years trying to kick-start the economy with low rates and other policies, with little success. Which raises this question: Will more of the same help now? Among the doubters is Thomas M. Hoenig, the soon-to-be former president of the Federal Reserve Bank of Kansas City. Mr. Hoenig, at the helm of the Kansas City Fed for the last 20 years, has thought...

WASHINGTON (MarketWatch) — Struggling to clear its inventory of foreclosed properties, the Obama administration said Wednesday it’s looking for investor ideas for converting more than 92,000 foreclosed properties owned by the U.S. government into rental units, a sign of the depths to which the U.S. housing market has sunk. “Exploring new options for selling these foreclosed properties will help expand access to affordable rental housing, promote private investment in local housing markets and support neighborhood and home-price stability,” Treasury Secretary Timothy Geithner said in a statement. The Obama administration is working with the Federal Housing Finance Agency, the regulator for...

In a Bloomberg TV interview following today's quixotic "QE3/non-QE3 announcement, which is Operation Twist 2, but not LSAP, and ushers in economic recession, even as it sends risk assets soaring, and somehow pushes the 2 Year a whopping 20 bps tighter so buy,buy, buy" and is really very much ado about nothing, the always outspoken Marc Faber had some very choice words about life, the universe and especially the residents of the Marriner Eccles building. While there still appears to be some confusions as to whether today's Fed decision to peg rates at zero for 2 years is QE3 or...

Back during the financial crisis of 2008, the American people were told that the largest banks in the United States were "too big to fail" and that was why it was necessary for the federal government to step in and bail them out. The idea was that if several of our biggest banks collapsed at the same time the financial system would not be strong enough to keep things going and economic activity all across America would simply come to a standstill. Congress was told that if the "too big to fail" banks did not receive bailouts that there would...