A Current Pulse On The Puzzle Pieces

This blogger summarizes the current state in 12 Ominous Signs For World Financial Markets:

#1 Corporate insiders are getting out of the U.S. stock market at an absolutely blinding pace. It is being reported that the ratio of corporate insider selling to corporate insider buying last week was 1,411 to 1, and this week the ratio has soared even higher and is at 2,341 to 1.
#2 Many of the world's wealthiest people are buying absolutely massive quantities of gold right now.
#3 It is being reported that J.P. Morgan is gobbling up the rights to as much physical gold as it possibly can.
#4 The United States Mint has announced that it has run out of 1-ounce, 24-karat American Buffalo gold bullion coins and that it will not be selling any more of them in 2010.
#5 It is becoming increasingly difficult to explain the unusually high option volume that we are witnessing right now.
#6 Some very large investors are making massive bets that the S&P 500 is going to take a serious tumble during the month of October.
#7 On Tuesday, the Bank of Japan shocked world financial markets by cutting interest rates even closer to zero and by setting up a 5 trillion yen quantitative easing fund.
#8 The president of the Federal Reserve Bank of New York and the president of the Federal Reserve Bank of Chicago are both publicly urging the Fed to do much more to stimulate the U.S. economy, including beginning a new round of quantitative easing, even if it means a significant rise in the U.S. inflation rate.
#9 Nobel Prize-winning economist Joseph Stiglitz told reporters on Tuesday that the loose monetary policies of the Federal Reserve and the European Central Bank are throwing the world into "chaos".
#10 At the end of September, federal regulators announced a $30 billion bailout of the U.S. wholesale credit union system.
#11 Bank of America, JPMorgan Chase and GMAC Mortgage have all suspended foreclosures in many U.S. states due to serious concerns about foreclosure procedures. Now, Texas Attorney General Greg Abbott is actually demanding that all mortgage servicing companies in the state of Texas immediately suspend all foreclosures, the selling of foreclosed properties and the eviction of people living in foreclosed properties until they have completed a review of their foreclosure procedures.
#12 Not only that, but Nancy Pelosi and 30 other members of Congress are requesting a federal investigation of the foreclosure practices of U.S. mortgage lenders. Needless to say, this controversy has the potential to turn the entire U.S. mortgage industry into an absolute quagmire.


So are dark days ahead for world financial markets?  Well, yeah, but it is incredibly hard to predict exactly when things are going to fall apart.  The truth is that there are going to be a whole lot more "crashes" and "collapses" in the years ahead.  The important thing, as discussed yesterday, is to keep your eye on the long-term trends.  The U.S. economy is undeniably in decline. The only thing keeping the economy going at this point is a rapidly growing sea of red ink. Debt is literally everywhere. It is what our entire financial system is based on in 2010. In the months and years to come, the major players are going to try very hard to keep all the balls in the air and to continue the massive shell game that is going on, but in the end the whole thing is going to collapse like a house of cards.  Unfortunately, we have been destroying the U.S. economy for decades and there is simply not going to be a happy ending to this story.

The entire post:
http://theeconomiccollapseblog.com/archives/12-ominous-signs-for-world-financial-markets

The Grass Is Always Greener On The Other Teet

My wife and daughter have been fostering cats and kittens from the animal shelter lately and I've had the opportunity to observe these precious little creatures. One of the funniest things to spectate is when the mama lays down and the kittens bombard her in search of a teet full of milk. They look like kamikazi pilots diving over one another in search of their meal. While there are enough teets for each and every kitten, it's hilarious to watch one abort his/her teet and leep over their siblings to fight for one that is already taken. Then the one that gets pushed off has to aggressively seek a new teet. In the end, they all get fed, but during the process, each one at some point decides he has to search for a teet that might be better.

While on the subject of milking the system, I wasn't shocked yesterday when Hank Paulson announced a major shift in his bailout plan. He stated "the facts have changed". Really? What facts and how can the financial system change that fast in four weeks? The reality is, they are perplexed on how to catch the "falling arrow". Now the auto industry is searching for it's teet. How many teets do the Feds have? At some point, mama's going to say, I'm all out of milk! Then what?

I thought that it would be informative to pass along the list of banks that have announced participation in the Treasury program:

FIRST ROUND
Citgroup $25 billion
Wells Fargo $25 billion
JPMorgan Chase $25 billion
Bank of America $15 billion
Merrill Lynch $10 billion
Goldman Sachs $10 billion
Morgan Stanley $10 billion
Bank of New York $3.0 billion
State Street $2.0 billion
TOTAL $125 billion

SECOND ROUND
PNC $7.7 billion
Capital One $3.6 billion
SunTrust $3.5 billion
Regions Financial $3.5 billion
Fifth Third $3.4 billion
Key $2.5 billion
Comerica $2.25 billion
Northern Trust $1.5 billion
Huntington $1.4 billion
First Horizon $866 million
City National $395 million
Valley National $330 million
Washington Federal $230 million
First Niagara $186 million
TOTAL $31.36 billion

Derivatives and JPM Chase

Jim Puplava posted a great article on the banks last year...especially focused
on those with large derivative positions. JPM Chase has an incredible derivative position.
The wild ride continues!!