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Solyndra's Whorehouse Lender - (www.businessinsider.com) If you want to find out what happened with Solyndra you have to follow the money. I did. The half billion dollars of taxpayer dough that is probably lost in Sol came from the Federal Financing Bank (“FFB”). It’s worth a look at this bank to see what else is going on. FFB is a bank that is owned and controlled by the US Treasury. The chairman of the Board is the TSec. (Tim Geithner). With the (big) exception of the Post Office all of the loans at FFB are guaranteed by government agencies. Technically speaking, FFB has no risks on loans guaranteed by an agency like the DOE. But I don’t think that should absolve Tim Geithner of any responsibility regarding the losses the country faces with Solyndra. If he, (or anyone else at Treasury) puts their pen to a ½ billion loan, they better well know where the taxpayers money is going. That didn’t happen. FFB has been around for 40+ years. I believe it has always been a bank that has been used and abused by whoever happened to be running the show at Treasury. For example; from 9/30/2008 (Pre - Tim and O) to 9/30/3009 (Post - Tim and O) the FFB lent out $17.1 billion to the nice folks at the National Credit Union Administration’s “Liquidity Fund”. NCU is the guarantor of the deposits in the country’s Credit Unions (similar to FDIC). They were up against it in 2009. They had no money left in the till to insure that those deposits would be safe. A bailout was needed to avoid a crisis. But rather than have a public debate about this, the FFB just borrowed some money and wrote a check to NCU. Problem solved.
Advice on Debt? Europe Suggests U.S. Can Keep It - (www.nytimes.com) The United States has long been considered a financial adviser to the rest of the world. But these days, American officials come carrying baggage. Financial officials from the United States, once called “the committee to save the world” after the Asian crisis in the 1990s, now find themselves uttering apologies for the harm caused to the world by the 2008 financial crisis and coating their advice to European nations with the knowing nod of the battle-hardened. The change in tone was on display here on Friday when Treasury Secretary Timothy F. Geithner made an unusual appearance at a meeting of euro zone finance ministries. Mr. Geithner had been invited to offer some advice on fixing Europe’s sovereign debt and banking problems. European leaders, who have been slow to react to the root causes of the problem, emerged from the meeting dismissive of Mr. Geithner’s ideas and, in some cases, even of the idea that the United States was in a position to give out such pointers.
Greece Nears a Tipping Point in Its Debt Crisis - (www.nytimes.com) Greek leaders struggled through the weekend to agree to a set of radical budget reductions that would satisfy foreign lenders’ demands even as they tried to stave off mounting resistance to those cuts at home. Reflecting the urgency of the situation, the prime minister of Greece, George A. Papandreou, canceled a planned trip to Washington this week and held talks with his cabinet on Sunday. The Greeks face an October deadline to qualify for 8 billion euros, or $11 billion, in aid, without which Greece will certainly default on its growing debt. Over the weekend, European finance ministers issued stern warnings at a meeting in Poland that failure to meet financial targets would imperil the release of the payment. The payment is just one installment in a larger package of 110 billion euros, or $152.6 billion, in aid agreed to by euro zone members in spring 2010; a second bailout fund, for 109 billion euros, or $150.2 billion, was agreed to in July, though that has yet to be ratified.
UBS Rushes To Make Changes After The UBS Trader's $2.3 Billion Loss Shows $10 Billion Wagered On Positions - (www.businessinsider.com) The fallout from the UBS trader who lost $2.3 billion of the firm's money betting on index futures is grim. Turns out, he wagered $10 billion on positions on S&P 500, DAX, and EuroStoxx index futures over the last three months, and he allegedly falsely accounted for the hedges off-setting the potetial risk of those trades. Before Kweku Adoboli's ficitious hedges were discovered, the firm had plans to layoff over 3,500 people in order to save $2 billion. Abodoli's loss more than reverses the savings effect of those layoffs.
Obama Proposes $4 Trillion in Spending Cuts "Over 120 Years" - (Mish at globaleconomicanalysis.blogspot.com) The theater of the absurd regarding spending cuts hit a new high today. We are now counting budget cuts not over a year, or even ten years, but rather 120 years. Please consider Obama to propose $1.5 trillion in new tax revenue:
The president on Monday will announce a proposal that includes the new taxes, nearly $250 billion in reductions in Medicare spending, $330 billion in cuts in other mandatory benefit programs, and savings of $1 trillion from the withdrawal of troops from Iraq and Afghanistan. The $1.5 trillion in tax revenue would include about $800 billion realized over 10 years from repealing the Bush-era tax rates for couples making more than $250,000. It also would place limits on deductions for wealthy filers and end certain corporate loopholes and subsidies for oil and gas companies. By adding the tax revenue, about $580 billion in proposed mandatory spending cuts, the savings from troop withdrawals and $1 trillion in spending cuts already in place, the combined deficit reduction would total about $4 trillion over 120 years.
Germany Rejects Using ECB Leverage to Increase European Rescue Fund’s Size - (www.bloomberg.com)
Finance Chiefs Fail to Bolster Euro on Greece - (www.bloomberg.com)
Hedge Fund Heavyweight Says Gold Bet Not Over - (www.bloomberg.com)
ECB'S Weidmann says wrong to ditch monetary policy principles - (www.reuters.com)
EU ministers see need for stronger bank sector - (www.reuters.com)
Volcker Rule May Extend to Overseas Banks - (www.bloomberg.com)
Italy’s Debt Remains Under Review for Moody’s Downgrade on Growth Concern - (www.bloomberg.com)
London Home Prices Surge as Investors Seek Safety in Property - (www.bloomberg.com)
EU officials seek to dispel fears of credit crunch - (www.reuters.com)
Central banks return as gold buyers - (www.ft.com)
Fears over exemptions to Volcker rule - (www.ft.com)
Meetings on European Debt Crisis End in Debate, but Little Progress - (www.nytimes.com)
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