Post by jeffolie on Jul 11, 2012 15:59:14 GMT -6
privilege and corruption become more public at bottoms than at tops...I doubt this is a bottom so I expect massive amounts of 'privilege and corruption' exposes near the bottom...thousands of cities will go bankrupt, thousands of corporations will go bankrupt...corruption will be commonly exposed
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"The commercial world is very frequently put into confusion by the bankruptcy of merchants, that assumed the splendour of wealth only to obtain the privilege of trading with the stock of other men, and of contracting debts which nothing but lucky casualties could enable them to pay; till after having supported their appearance a while by tumultuary magnificence of boundless traffic, they sink at once, and drag down into poverty those whom their equipages had induced to trust them."
Samuel Johnson: The Rambler, January 7, 1752
The regulators are clueless and conflicted, the self-regulators are careless and complicit, the industry is enmeshed in cronyism, and fraud is broadly tolerated as way of doing business, a droit du seigneur of the elite over customer funds and assets, pricing and all other forms of news and information. It has every character of an advanced form of control fraud.
And as for the politicians, one might conclude as the Parliament had done with Mr. Bob Diamond, that they are either incompetent or indirectly complicit as well, in the manner of a credibility trap. It seems hard to explain it any other way.
The culture of privilege and corruption through the mispricing of risk and outright fraud in the Anglo-American financial system is pervasive, stuffed with phony paper. No outrage seems too extreme, too great, and therefore nothing can be said to be safe.
Reuters
Exclusive: Iowa futures broker forged bank records for years - source
By Ann Saphir
Jul 10, 2012 7:23pm EDT
CHICAGO (Reuters) - Russell Wasendorf Sr., the sole owner and chairman of stricken futures broker Peregrine Financial Group, Inc., intercepted and forged bank documents for more than two years to cover up hundreds of millions of dollars in missing money, a person close to the situation told Reuters.
www.jessescrossroadscafe.blogspot.com/2012/07/pfgbest-f-to-r-to-aud-faked-bank.html
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3rd CA city bankruptcy: San Bernardino 200k pop east of Los Angeles
Almost 800,000 not federal, government workers have lost their jobs [ABC news item broadcast on july 10th evening news] from the peak of 2007.
My jeffolie prediction came true: jeffolie predicts…US STATES, CITIES, LOCAL AGENCIES CRISIS: major layoffs by the end of 2012, bills will not be paid, some bonds will default.
====================================================
July 11, 2012
Municipal bonds discount San Bernardino bankruptcy
NEW YORK (MarketWatch) — Municipal bond investors on Wednesday shrugged off the move by San Bernardino, Calif., to file for bankruptcy as the broader market continues to perform relatively well, indicating investors understand these things will occasionally happen.
San Bernardino, a city of about 200,000 people east of Los Angeles, thus is on track to be the third municipality in the Golden State to opt for bankruptcy, joining Stockton and Mammoth Lakes. Read more on San Bernardino bankruptcy filing.
Defaults — which a bankruptcy filing doesn’t even necessarily portend — are exceedingly rare among investment-grade municipal bonds. Cities and counties face huge pressures from weak revenues due to slow economic growth, especially in areas hit the hardest by the housing bust and foreclosures, and from growing underfunded liabilities for public pensions.
But on the whole, municipalities tend to pay their debtholders, and for those at risk, the signals often come years before the actual filing.
“There’s still strong demand because there are more compelling reasons to jump into municipal bonds,” said James Barnes, senior fixed-income manager at National Penn Investors Trust Co.
“We’re going to have bankruptcies here and there,” Barnes said. Unless it turns into a streak of smaller bankruptcies or a big one that comes out of the blue, “the market is absorbing the news pretty well.”
And even though California bankruptcies have been in the spotlight, the state’s muni funds have outperformed all municipal fund categories with the exception of high-yield munis.
In the year to date, long California municipal funds have returned 6.61%, according to Morningstar.
Muni national long funds have returned 5.69% over the same period, as have taxable multisector bond funds, Morningstar found.
Late Wednesday, San Bernardino’s city council voted for the municipality to file for bankruptcy.
The debt prices San Bernardino has to pay have held up fairly well after the vote to file for bankruptcy, said Josh Gonze, a municipal-bond fund manager at Thornburg Investment Management.
The city’s lease-revenue bonds and special tax bonds are trading above 90 cents on the dollar, analysts said.
“That’s cheap compared to high quality bonds, but indicates the debt is far from collapsing and is still attracting a bid that’s nearly face value,” or 100 cents on the dollar, said Gonze, who manages the Thornburg California Limited Term Municipal Fund LTCIX +0.07% .
At the end of last month, Stockton, a community of 292,000 east of San Francisco, became the biggest U.S. city to go into bankruptcy, according to Bloomberg News. And at the beginning of July, the tiny mountain resort town of Mammoth Lakes filed for protection from creditors, according to news reports.
Barnes said, “there have been some pockets, but not enough that would bring investors back to that skittishness seen” starting late in 2010 after one analyst predicted a massive amount of municipal defaults — something that never happened.
“It’s basically having zero impact because there are thousands of municipalities out there,” he said.
That’s impressive, he said, in light of how sensitive investors in all markets have been to negative news, whether out of Europe or domestically.
www.marketwatch.com/story/municipal-bonds-discount-3rd-california-bankruptcy-2012-07-11?dist=afterbell
===============================
jeffolie predicts…US STATES, CITIES, LOCAL AGENCIES CRISIS: major layoffs by the end of 2012, bills will not be paid, some bonds will default.
Read more: www.unlawflcombatnt.proboards.com/index.cgi?board=general&action=display&thread=10102#ixzz20LkLizcz
================
"The commercial world is very frequently put into confusion by the bankruptcy of merchants, that assumed the splendour of wealth only to obtain the privilege of trading with the stock of other men, and of contracting debts which nothing but lucky casualties could enable them to pay; till after having supported their appearance a while by tumultuary magnificence of boundless traffic, they sink at once, and drag down into poverty those whom their equipages had induced to trust them."
Samuel Johnson: The Rambler, January 7, 1752
The regulators are clueless and conflicted, the self-regulators are careless and complicit, the industry is enmeshed in cronyism, and fraud is broadly tolerated as way of doing business, a droit du seigneur of the elite over customer funds and assets, pricing and all other forms of news and information. It has every character of an advanced form of control fraud.
And as for the politicians, one might conclude as the Parliament had done with Mr. Bob Diamond, that they are either incompetent or indirectly complicit as well, in the manner of a credibility trap. It seems hard to explain it any other way.
The culture of privilege and corruption through the mispricing of risk and outright fraud in the Anglo-American financial system is pervasive, stuffed with phony paper. No outrage seems too extreme, too great, and therefore nothing can be said to be safe.
Reuters
Exclusive: Iowa futures broker forged bank records for years - source
By Ann Saphir
Jul 10, 2012 7:23pm EDT
CHICAGO (Reuters) - Russell Wasendorf Sr., the sole owner and chairman of stricken futures broker Peregrine Financial Group, Inc., intercepted and forged bank documents for more than two years to cover up hundreds of millions of dollars in missing money, a person close to the situation told Reuters.
www.jessescrossroadscafe.blogspot.com/2012/07/pfgbest-f-to-r-to-aud-faked-bank.html
==========================
3rd CA city bankruptcy: San Bernardino 200k pop east of Los Angeles
Almost 800,000 not federal, government workers have lost their jobs [ABC news item broadcast on july 10th evening news] from the peak of 2007.
My jeffolie prediction came true: jeffolie predicts…US STATES, CITIES, LOCAL AGENCIES CRISIS: major layoffs by the end of 2012, bills will not be paid, some bonds will default.
====================================================
July 11, 2012
Municipal bonds discount San Bernardino bankruptcy
NEW YORK (MarketWatch) — Municipal bond investors on Wednesday shrugged off the move by San Bernardino, Calif., to file for bankruptcy as the broader market continues to perform relatively well, indicating investors understand these things will occasionally happen.
San Bernardino, a city of about 200,000 people east of Los Angeles, thus is on track to be the third municipality in the Golden State to opt for bankruptcy, joining Stockton and Mammoth Lakes. Read more on San Bernardino bankruptcy filing.
Defaults — which a bankruptcy filing doesn’t even necessarily portend — are exceedingly rare among investment-grade municipal bonds. Cities and counties face huge pressures from weak revenues due to slow economic growth, especially in areas hit the hardest by the housing bust and foreclosures, and from growing underfunded liabilities for public pensions.
But on the whole, municipalities tend to pay their debtholders, and for those at risk, the signals often come years before the actual filing.
“There’s still strong demand because there are more compelling reasons to jump into municipal bonds,” said James Barnes, senior fixed-income manager at National Penn Investors Trust Co.
“We’re going to have bankruptcies here and there,” Barnes said. Unless it turns into a streak of smaller bankruptcies or a big one that comes out of the blue, “the market is absorbing the news pretty well.”
And even though California bankruptcies have been in the spotlight, the state’s muni funds have outperformed all municipal fund categories with the exception of high-yield munis.
In the year to date, long California municipal funds have returned 6.61%, according to Morningstar.
Muni national long funds have returned 5.69% over the same period, as have taxable multisector bond funds, Morningstar found.
Late Wednesday, San Bernardino’s city council voted for the municipality to file for bankruptcy.
The debt prices San Bernardino has to pay have held up fairly well after the vote to file for bankruptcy, said Josh Gonze, a municipal-bond fund manager at Thornburg Investment Management.
The city’s lease-revenue bonds and special tax bonds are trading above 90 cents on the dollar, analysts said.
“That’s cheap compared to high quality bonds, but indicates the debt is far from collapsing and is still attracting a bid that’s nearly face value,” or 100 cents on the dollar, said Gonze, who manages the Thornburg California Limited Term Municipal Fund LTCIX +0.07% .
At the end of last month, Stockton, a community of 292,000 east of San Francisco, became the biggest U.S. city to go into bankruptcy, according to Bloomberg News. And at the beginning of July, the tiny mountain resort town of Mammoth Lakes filed for protection from creditors, according to news reports.
Barnes said, “there have been some pockets, but not enough that would bring investors back to that skittishness seen” starting late in 2010 after one analyst predicted a massive amount of municipal defaults — something that never happened.
“It’s basically having zero impact because there are thousands of municipalities out there,” he said.
That’s impressive, he said, in light of how sensitive investors in all markets have been to negative news, whether out of Europe or domestically.
www.marketwatch.com/story/municipal-bonds-discount-3rd-california-bankruptcy-2012-07-11?dist=afterbell
===============================
jeffolie predicts…US STATES, CITIES, LOCAL AGENCIES CRISIS: major layoffs by the end of 2012, bills will not be paid, some bonds will default.
Read more: www.unlawflcombatnt.proboards.com/index.cgi?board=general&action=display&thread=10102#ixzz20LkLizcz