Lobbying Firm Warns Bankers: Beware Of Occupy Wall Street

Discussion in 'Politics' started by Lakhota, Nov 20, 2011.

  1. Lakhota
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    Lakhota Diamond Member

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    More: Lobbying Firm Memo To Advise Wall Street Clients On Occupy Movement (VIDEO)

    The Source: Exclusive: Lobbying Firm's Memo Spells Out Plan to Undermine Occupy Wall Street (VIDEO)

     
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    Last edited: Nov 20, 2011
  2. Lakhota
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    Lakhota Diamond Member

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    Now tell me these brave young American patriots aren't making a difference! Gooo OWS!!!!!

    The Fat Cats are getting nervous...
     
  3. Chris
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    Chris Gold Member

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    They should be.

    They destroyed the world economy, and now the light is being shinned on them.
     
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  4. Lakhota
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    Lakhota Diamond Member

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    Last edited: Nov 20, 2011
  5. Charles_Main
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    Charles_Main AR15 Owner

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    Left leaning idiot Politicians Destroyed the World Economy. People just like you.
     
  6. Chris
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    Chris Gold Member

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  7. Chris
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    Buffett's "time bomb" goes off on Wall Street

    (Reuters) - On Main Street, insurance protects people from the effects of catastrophes.

    But on Wall Street, specialized insurance known as a credit default swaps are turning a bad situation into a catastrophe.

    When historians write about the current crisis, much of the blame will go to the slump in the housing and mortgage markets, which triggered the losses, layoffs and liquidations sweeping the financial industry.

    But credit default swaps -- complex derivatives originally designed to protect banks from deadbeat borrowers -- are adding to the turmoil.

    "This was supposedly a way to hedge risk," says Ellen Brown, the author of the book "Web of Debt."

    "I'm sure their predictive models were right as far as the risk of the things they were insuring against. But what they didn't factor in was the risk that the sellers of this protection wouldn't pay ... That's what we're seeing now."

    Brown is hardly alone in her criticism of the derivatives. Five years ago, billionaire investor Warren Buffett called them a "time bomb" and "financial weapons of mass destruction" and directed the insurance arm of his Berkshire Hathaway Inc (BRKa.N) to exit the business.

    LINKED TO MORTGAGES

    Recent events suggest Buffett was right. The collapse of Bear Stearns. The fire sale of Merrill Lynch & Co Inc MER.N. The meltdown at American International Group Inc (AIG.N). In each case, credit default swaps played a role in the fall of these financial giants.

    The latest victim is insurer AIG, which received an emergency $85 billion loan from the U.S. Federal Reserve late on Tuesday to stave off a bankruptcy.

    Over the last three quarters, AIG suffered $18 billion of losses tied to guarantees it wrote on mortgage-linked derivatives.

    Its struggles intensified in recent weeks as losses in its own investments led to cuts in its credit ratings. Those cuts triggered clauses in the policies AIG had written that forced it to put up billions of dollars in extra collateral -- billions it did not have and could not raise.

    EASY MONEY

    When the credit default market began back in the mid-1990s, the transactions were simpler, more transparent affairs. Not all the sellers were insurance companies like AIG -- most were not. But the protection buyer usually knew the protection seller.

    As it grew -- according to the industry's trade group, the credit default market grew to $46 trillion by the first half of 2007 from $631 billion in 2000 -- all that changed.

    An over-the-counter market grew up and some of the most active players became asset managers, including hedge fund managers, who bought and sold the policies like any other investment.

    And in those deals, they sold protection as often as they bought it -- although they rarely set aside the reserves they would need if the obligation ever had to be paid.

    In one notorious case, a small hedge fund agreed to insure UBS AG (UBSN.VX), the Swiss banking giant, from losses related to defaults on $1.3 billion of subprime mortgages for an annual premium of about $2 million.

    The trouble was, the hedge fund set up a subsidiary to stand behind the guarantee -- and capitalized it with just $4.6 million. As long as the loans performed, the fund made a killing, raking in an annualized return of nearly 44 percent.

    Buffett's time bomb goes off on Wall Street | Reuters
     
  8. Chris
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    A £516 trillion derivatives ‘time-bomb’
    Not for nothing did US billionaire Warren Buffett call them the real ‘weapons of mass destruction’


    By Margareta Pagano and Simon Evans
    12 October 12 2008

    The market is worth more than $516 trillion, (£303 trillion), roughly 10 times the value of the entire world’s output: it’s been called the “ticking time-bomb”.

    It’s a market in which the lead protagonists – typically aggressive, highly educated, and now wealthy young men – have flourished in the derivatives boom. But it’s a market that is set to come to a crashing halt – the Great Unwind has begun.

    Last week the beginning of the end started for many hedge funds with the combination of diving market values and worried investors pulling out their cash for safer climes.

    Some of the world’s biggest hedge funds – SAC Capital, Lone Pine and Tiger Global – all revealed they were sitting on double-digit losses this year. September’s falls wiped out any profits made in the rest of the year. Polygon, once a darling of the London hedge fund circuit, last week said it was capping the basic salaries of its managers to £100,000 each. Not bad for the average punter but some way off the tens of millions plundered by these hotshots during the good times. But few will be shedding any tears.

    The complex and opaque derivatives markets in which these hedge funds played has been dubbed the world’s biggest black hole because they operate outside of the grasp of governments, tax inspectors and regulators. They operate in a parallel, shadow world to the rest of the banking system. They are private contracts between two companies or institutions which can’t be controlled or properly assessed. In themselves derivative contracts are not dangerous, but if one of them should go wrong – the bad 2 per cent as it’s been called – then it is the domino effect which could be so enormous and scary.

    A £516 trillion derivatives ‘time-bomb’ « Did You Know
     
  9. likeabird03
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    likeabird03 Active Member

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    Chris Hayes? I always thought that strange looking character was Rachel Maddow.
     
  10. Lakhota
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    Lakhota Diamond Member

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    Chris Hayes is sharp as a tack. He's my kind of American patriot.
     

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