Citi closes gas-linked MasterCards without warning Citigroup shuts down many MasterCards without warning consumers; letters sent 5 days later
By Eileen Aj Connelly, AP Personal Finance Writer
On 7:17 pm EDT, Monday October 19, 2009
NEW YORK (AP) -- Shannon Burdette tried to pay with her Shell Mastercard after filling up her gas tank this weekend but found the card rejected.
Confused, she called the customer service line on the back of the card, issued by Citibank, and was told the account was closed because of something that appeared on her credit report. But when the Sykesville, Md., resident got a copy of her credit report online, the only negative thing she saw was "closed at credit grantor's request" on the Shell MasterCard account. Citi closes gas-linked MasterCards without warning - Yahoo! Finance
Armageddon in Alabama Proves Parable for Local U.S. Governments
By Ken Wells
Oct. 19 (Bloomberg) -- In its 190-year history, Jefferson County, Alabama, has endured a cholera epidemic, a pounding in the Civil War, gunslingers, labor riots and terrorism by the Ku Klux Klan. Now this namesake of Thomas Jefferson, anchored by Birmingham, is staring at what one local politician calls financial “Armageddon.”
The spectacle -- a tax struck down, about 1,000 county employees furloughed, a politician indicted over $3 billion in sewer debt that may lead to the largest municipal bankruptcy in history -- has elbowed its way up the ladder of county lore.
Is it late enough to start talking about PMs again?
Not much to say here. I am already 100% in, and so cannot invest any more (won't use margin). My stocks are certificated, and my physical is locked up overseas, so no crooked broker can touch my stash, and if you break into my house, all you can steal is my tin foil hat.
I hope these people stretching to buy - like the buyer mentioned in the previous post paying 54% of her income for her house, including multiple jobs - realize they have to pay back the entire credit if they don't own and occupy the home for three years.
CR - what happens if the buyer is foreclosed and evicted from the house within 3 years?
“People want to kill somebody, but they don’t know who to shoot at,” says Russell Cunningham, past president of the Birmingham Regional Chamber of Commerce.
Oh, my! What a surprise!
Who could have known!?
Oh, my!
Hoocoodanode?
edit:
Russell, I hope you got body armor, buddy, cause I got a feeling that anybody who looks even remotely responsible down there is gonna need it.
.....the FedGov will send the IRS cockroaches into every hole and burrow to retrieve anything with which to feed its growing malodorous body. That would be a job worse than a cop - at least cops get an "atta-boy" once in a while between the heart-felt "I hope you die in your sleep" type comments.
Not much to say here. I am already 100% in, and so cannot invest any more (won't use margin). My stocks are certificated, and my physical is locked up overseas, so no crooked broker can touch my stash.
I don't have the stuff about my stuff locked up overseas, but I'm mostly positioned like yourself. Now, how do you plan to get overseas if necessary?
Tired of DOW 10,000? Want a glimpse of the future? From my online serial novel of life in America in the near future:
sample
I took a look at the next guy. While I did, Night questioned Josh about DC. "What kind of policies were in effect. Did he hear any news on the way out? Had he heard any news since?" I moved over to the next guy. Like all the others he was White. I would have been happier to have Juan and Jose. They understood life was a bitch, and they knew how to work. Gym muscles were not work muscles. Juan and Jose usually could work the ass off the Josh's of the world. The Josh types would eventually harden up, but I didn't have a year to wait for it. I wouldn't care if they only spoke Spanish. Hell, we could get by on a 50 word vocabulary quite well. Too bad. Juan and Jose weren't around. Josh was.
I have known a few cops. Periodically, there are moments when they make a real, positive difference in the lives of their fellow men. Like pulling victims from a car wreck, or preventing physical violence from being perpetrated on another human being. That can almost make up for screwing your neighbor with speed traps or code violations.
No such job satisfaction for IRS agents. Yeah, fork it over unemployed breadwinner. Obamarama needs to fly his entourage to Copenhagen to win real estate deals for cronies.
“People want to kill somebody, but they don’t know who to shoot at,” says Russell Cunningham, past president of the Birmingham Regional Chamber of Commerce.
America... just a nation of two hundred million used car salesmen with all the money we need to buy guns and no qualms about killing anybody else in the world who tries to make us uncomfortable. -- Hunter S. Thompson
No such job satisfaction for IRS agents. Yeah, fork it over unemployed breadwinner. Obamarama needs to fly his entourage to Copenhagen to win real estate deals for cronies.
In the later Roman Empire era, criminals served out some punishments by sitting on town councils and being responsible to the government for tax collections. The job had gotten so miserable that no one would willingly serve on the councils responsible for collections, and some over-eager governors would rely on a large selection of corporal and capital punishment for collectors who came up short. Such is the way for such folks.
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When people start hanging up IRS folks can carve "Fed" in their chest, then we will know how bad it has gotten for the collective whole.
HONOLULU – At a time when President Barack Obama is pushing for more time in the classroom, his home state has created the nation's shortest school year under a new union contract that closes schools on most Fridays for the remainder of the academic calendar. The deal whacks 17 days from the school year for budget-cutting reasons and has education advocates incensed that Hawaii is drastically cutting the academic calendar at a time when it already ranks near the bottom in national educational achievement.
More chillin' time for the students. Why not? It isn't like they are going to be working any time soon.
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Edit: Also just because they aren't in school doesn't mean they cannot still be learning. Unfortunately, it will be up to parents to see to it and not the Public Nannicational System
As I watch the storm troopers in full combat regalia (more than they use in the infantry, by the way) go after dangerous pot heads, I dream of the day when pot is de-criminalized. Most cops I have known were very clear-eyed. I wonder if the Humboldt County drug task force members actually believe the anti-pot rhetoric they spew, or if it is just talking points from on high.
That's for fellow cops, not saccharine BS from the brass. But I'm sure a career would not be helped by saying: "You know, when we let these dudes grow their weed in the woods, we had no problem. The urban blight came when we forced the grow houses in doors."
nova:
Some no doubt do. However, I have met few people more cynical WRT the War on Drugs than cops.
Outside the San Francisco federal building that December 2007 morning, dozens of photographers mingled around satellite-TV trucks. A couple of women in bikinis shivered as they tried to take advantage of the scene to advertise the virtues of a vegan lifestyle. Gradually the reporters and lawyers filed into the courtroom for the main event. A dour courtroom artist in a black suit entered with her sketch pad, her pens and pencils hanging around her neck like bad jewelry.
About 8:30 a bald guy strode in from a side door, taking a seat in front. Jeff Novitzky, IRS agent and Barry Bonds’s nemesis, wore a dark suit and looked straight ahead. A few minutes before nine Bonds made his entry. His dark suit was of a better cut than Novitzky’s and hung easily off his broad shoulders. The baseball star chatted and joked with his lead attorney, Michael Rains. Bonds’s legal team was big enough to fill an infield.
That's for fellow cops, not saccharine BS from the brass.
I know of a cop that admitted to a person he was ticketing that he was doing what he was told. His department was behind on a expense account and needed additional revenue to make up the shortfall. The person who got the ticket complained to city hall, and my honest guy ended up working 1st shift/3rd shift rotations for months. Oddly, he had seniority over half the force, and yet, he was the one working odd shifts and getting no O/T. No official reason for his assignments, but he never had the courage again to speak honestly unless he really knew you.
"I hope these people stretching to buy - like the buyer mentioned in the previous post paying 54% of her income for her house, including multiple jobs - realize they have to pay back the entire credit if they don't own and occupy the home for three years."
Yeah, just like all the people who lied on their loan applications will be made to pay all the loans back with interest, on the original terms. It's another massive un intentional fraud on those who are more responsible.
I knew a deputy in Ohio who told me his department didn't go after pot growers because they would end up locking up half the county. They would bust just enough folks (on small amounts) to show the Feds they were serious on the War on Drugs.
They would bust just enough folks (on small amounts) to show the Feds they were serious on the War on Drugs.
Yep. The locals don't want to do it, and they need carrots to do it (Sticks don't work too well sans ripping away the carrots). Take away the federal funding, and I imagine that our local enforcement policies will start making much more sense and being more responsive to the local wants.
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I could be full of sh*t too.
I remember the day I was old enough to realize that the cops in my small town in Ohio had grown up there just like I did, and knew exactly who was selling dope just like I did, and they only busted people when they got pissed off or a local politician needed a distraction. Oddly, I don't think most of the dope smokers ever figured that out, at least not until after the first time they went to jail.
Oddly, I don't think most of the dope smokers ever figured that out
Pot Smokers of Smallville USA aren't exactly known for being Einsteins. The sad part is that they are rarely a burden to the society around them, and the culture of pot isn't that destructive. Compared to Rural Whiteville's problem with Meth, Pot should be promoted as the drug of choice.
No such job satisfaction for IRS agents. Yeah, fork it over unemployed breadwinner. Obamarama needs to fly his entourage to Copenhagen to win real estate deals for cronies.
I've done that job. The IRS is very lenient with people who truly can't pay, and those people don't give you that much trouble. It's the ones who can pay but just don't want to. Mostly the self-employed type who think they are god's gift to the world, which is what they learn listening to the malcontents on talk radio. They hire people at minimum wage with no benefits so they can live large, and they think they are the backbone of America. They make $80K/year but file tax returns showing $15K income, and then they stiff the govt on that bill if their brat in college needs a new car or whatever. I never lost any sleep over those types. But it is frustrating because there is so so much unpaid taxes, even in good times, and there are not enough people to audit or to collect the taxes. It's a cinch enforcing the Code on the little guy who just has a W-2 and a couple 1099-INTs. It's the folks who self report that are the problem. Kinda like those stated income loans, they are nothing but lies.
And just like the rich they want to trash social security. Since they never pay much into it (benefits based on the income they underreport wouldn't add up to a hill of beans for them), they just as soon ruin it for everyone else. That's how the R's keep the working class self-employed on the side of big business. They both have one dirty little secret in common.
Weed is sold in the relatively wealthy urban areas, and the money is brought back and spent in the poorer rural areas. Shutting down growers severly impacts rural economies. Of course, relying on pot for your economy is a problem, in itself.
I have family [BIL] in the IRS and a sister who was prosecutor criminal tax at DOJ... you have to seriously F/U to get their attention... either be a visible & intentional tax protester or big money white collar tax cheat to bring DOJ down on your head. My sis did something like 23 trials each and everyone involving $100Ks or millions of dollars in unpaid taxes by well heeled white collar perps - she got 23 convictions. Some did time - all paid hefty fines. Never once did she know of a case where orphan & widows people talk about face DOJ wrath - occasional & unpleasant audits sure - happens. But the heavy hand stuff is almost always directed at intentional evasion or really big money.
The local IRS agents can be persistent and miniature tyrants if not well supervised but their cases don't get kicked upstairs UNLESS there is something really fishy - and only then if there is real money involved & they want to send a message.
She got out of the biz in the first Bush administration [1990] - it was getting more and more political & RICO had just started being used [and abused]. I can only imagine what its like now considering the Obama appointments who had tax issues and didn't even receive a slap on the wrist [that made my very liberal sister livid - taxes really have become for the little people only]...
I went to high school in a small town in MA. I had that epiphany moment when a local cop, who was my neighbor, asked me if the kids still smoked up behind the Highland market. When he saw my face, he winked at me.
Pretty close to what I've seen too... and I'm one of those self-employed. Somebody is gonna pay for the empire... and the Leona Helmsley's sure aren't gonna do it [they said so].
taxes really have become for the little people only...
recently ( as of Oct. 15th), the IRS has drawn in 7,500 tax evaders, in accounts from $10K to $100M, hiding money in over 70 countries. The back taxes and penalties will not be insignificant.
Weed is sold in the relatively wealthy urban areas, and the money is brought back and spent in the poorer rural areas. Shutting down growers severly impacts rural economies. Of course, relying on pot for your economy is a problem, in itself.
Actually, this sounds like the opening for a pretty good novel.
recently ( as of Oct. 15th), the IRS has drawn in 7,500 tax evaders, in accounts from $10K to $100M, hiding money in over 70 countries. The back taxes and penalties will not be insignificant.
I can hardly wait to talk to my family about that - won't get good inside poop though until the cases close.
The back taxes and penalties will not be insignificant.
Enough to pay for a small bank failure?
Depends on how you define 'pay'... pay as in the net directly received from the fines & back taxes OR the revenue from better 'voluntary' compliance? You don't have to shoot the whole herd to effect a stampede.
I'm prepared to be underwhelmed. The penalties on the few years that get caught will be insignificant compared to the taxes that aren't persued.
Depends on if they go civil or criminal - if they go after some of these folks on criminal evasion... its gonna leave a mark. I don't get the feeling they will though - that means making rich people angry. Wouldn't want that.
A millionaire friend once told me that the wealthy always get the same tax advice -- when pushing the "gray areas" claim all deductions that can only result in a fine, but none that can lead to jail time.
Wholesale default across the US...how can this be unavoidable? All levels of government have budgets figured on a stable tax base and 5% unemployment. Now what? Decrease spending but the debt load isn't going away. Default and let the bond holders own the capital improvements? Get wacky like AZ and try and sell your public buildings with a lease back plan? Sell revenue producing infrastructure ala Chicago and their parking meters? Cut government spending to the bone and devolve to Detroit status? FFS Sheer genius surrounds us.
++++
My current favorite sign of collapse:
WW II war bonds
"States suing federal government for unclaimed war bonds
$16.7 billion in certificates has yet to be cashed in. Six states now say that Treasury officials haven't tried to find the bondholders or their descendants, and that states have a right to the money." States suing federal government for unclaimed war bonds - Los Angeles Times
Wholesale default across the US...how can this be unavoidable? All levels of government have budgets figured on a stable tax base and 5% unemployment. Now what? Decrease spending but the debt load isn't going away. Default and let the bond holders own the capital improvements? Get wacky like AZ and try and sell your public buildings with a lease back plan? Sell revenue producing infrastructure ala Chicago and their parking meters? Cut government spending to the bone and devolve to Detroit status?
Well sure. You make it sound bad when you say it that way...
My small town in upstate NY saw its personnel costs nearly double from last year. Health insurance and pension costs were the culprit (contributions to the State pension system increased by 33%). Tax revenue could rise and we would still be in a hole. Of course, it is not rising, but rather falling worse than anticipated. Lots of towns are looking at this fiscal black hole.
A millionaire friend once told me that the wealthy always get the same tax advice -- when pushing the "gray areas" claim all deductions that can only result in a fine, but none that can lead to jail time.
From what my family says he's right - then when caught just go 'awe shucks' and pay... then do it again next year. Happens all the time - it becomes a business calculation.
The real evasion people though aren't gray-liners... believe me... not even close. My sister had a couple real doozies... where the perp was a personal friend of the president, knew the attorney general & big campaign contributor but was discovered to have owed millions. Carefully structured evasion. His crime was so big even his connections wouldn't help him... They nailed him - my sis ran the trial. It was back in the mid-80s.
"It is too soon for history to evaluate their (Bernanke/Geitner's) work, because there hasn't been time for the unintended consequences of the 'do whatever it takes' decision-making to materialize."
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Just put this in the "Boy That Didn't Take Long" file. Stem to stern, we're built for fraud.
The Chinese do not trust America to carry out the great political affairs of the planet well. They find that ideology forms too large a part of the way in which Americans conceive international relations. On the other hand, the Chinese, before this financial crisis, regarded us as serious and reliable people in the fields of finance and the economy. They trusted our model and wished even to imitate it. The violence of the crisis, the irresponsibility shown by the great institutions of Wall Street much surprised and shocked the Chinese. We deeply disappointed them.
Today, they have accepted their losses, but they will never again trust us in financial matters. This is the great change. As they are pragmatic people, they understood it was necessary to manage this crisis in co-operation with us, so as to limit the damage to the real economies of our two countries. They take into account that a very large majority of their immense monetary reserves is in dollars and that their exports of consumer goods to America remain vital to the health of their manufacturing industries. The Chinese leaders managed this crisis in co-operation with their American counterparts during the last twelve months, and they will continue to do it. But nothing will be like before.
My favorite quote from the Jefferson County article was a line from the lead perp spoken at the time he purchased the fatal swaps: “You know, I get the impression that people think a bunch of rubes in Alabama shouldn’t be smart enough to utilize these swaps,” he told Bloomberg News that year.
Bet they had a few chuckles at the JPMorgan Holiday Party reading that line out loud while they raised their bonus checks aloft...
I was at a party last night with many of the Republican faithful who were seriously wondering what it would be like today if McCain and Pailin had won the election. Their impressions were not good.
While I agree wholeheartedly with the Chinese statement about the "irresponsibility shown by the great institutions of Wall Street", being lectured to by them as "too ideological" is pretty rich.
And if: "Today, they have accepted their losses, but they will never again trust us in financial matters.", then they have learned the most valuable lesson possible about financial markets and banks. BTW Hu, what's in your bank's balance sheets?
My guess is there would've been less stimulus, thus less of a short-term boost to the economy. That would have it's benefits. However, on the more important issues (financial reform, etc), I think McCain would be about where Obama is right now. On the bright side, if Palin was VP Saturday Night Live would be far more entertaining.
Might have been even more - just different. More tax cuts along w/ some fiscal stimulus. Hard to say - can only live one reality at a time even if they seem surreal at the time.
For C to be cutting off their gas cards at this point in the "recovery" tells you they are seeing something really scary happening, not only at Citi but in the credit world.
When they just freeze low credit line cards without warning, it doesn't mean they will get paid back all the money they've lent on those cards. They'll probably get paid back millions less. It just freezes their downside on those cards to what they already have lent.
It could be regulators are telling them they have to freeze in place, to hell with the consumer franchise or goodwill. But given the scarcity of credit for many consumers right now, it's not likely. It's probably an internal panic move on their part.
It may be that they see a pattern of ruthless defaults in low credit line consumer cards. People who know their credit is ruined, and don't think it's worth a big bank's time to go after $1,000 owed.
I think that the majority of the cards that Citibank canceled did not have outstanding balances. So called "deadbeat" accounts that are paid in full each month so Citibank is only collecting merchant fees.
"For C to be cutting off their gas cards at this point in the "recovery" tells you they are seeing something really scary happening, not only at Citi but in the credit world."
If you need to cut credit lines, once you cut the inactive cards, the next place to cut are the "co-branded" cards - with the revenue shares to the co-branding partner (Shell, etc.), these are lower profit cards to the bank issuer. Plus underwriting standards for co-branded cards tend to be looser. On the gas cards, cardholders usually get them to just get the cash rebate on the gas purchases, and don't tend to use them much for other purchases. Not surprised Citi is reducing gas co-brand programs.
Citi makes limited decisions without consulting the dream economic team. I read that article as a possible forewarning of Citi preparing to be broken on the crucible of insolvency. One of the TBTF has to be sacrificed to the populist rage.
Still trying to figure how they are going to make Saudi Prince Alwaleed bin Talal whole from his investment. Maybe GS will issue him some preferred stock, he wouldn't fall for the 10 year t-bill offer.
Mike in Long Island, if there is a foreclosure, the homeowners owes the entire tax credit. I wonder if these people realize the risks
Probably be as effective as trying to win a deficiency judgment... though taxes owed are not forgiven even in bankruptcy and IRS can garnish future wages.
I don't know if you caught Einhorn's comment that he views gold as being a currency that looks more attractive than any of the other major currencies in the world, all of which are weak. This is what several of us here have been trying to say, too, although some people still don't seem to understand it.
When I challenge people who say "the dollar will rally" to say what it will rally vs., this is what I'm trying to get across. The yen and yuan are artificially weak. The euro is going to get weaker. So, they aren't a good frame of reference for dollar strength or weakness. Gold price tells you most of what you need to know about dollar strength or weakness. The relationship is directly inverse. As gold goes up, dollar goes down. Oil is probably the next best dollar yardstick.
Hi CR folks... couple/three things real quick.
1. Notarized 401(k) cashout is in the mail - should be a few weeks.
2. Next step: remove BofA account and cash into smaller, local bank.
3. Co-worker went to credit card default court last Monday and 10 of 150 defaulters showed up for the event.
4. Just received notice today that another CC, all paid on time/etc., is going to 29.99% rate.
I'm pulling it all out, paying it all off, and I hope these bastards suck wind long and hard before they die.
I've talked long about doing it but it's now in motion. Hey Ken Lewis, et. al. - suck my balones!!!
Have fun without my cash to play with, you arseholes. Oh, and about those 3 new "for rent" and 5 "for sale" signs in my hood - good luck getting your money back cuz you idiots loaned to jackarses who can not and will not ever pay you back.
What has become of this freaking country? I despair, I really do.
recently ( as of Oct. 15th), the IRS has drawn in 7,500 tax evaders, in accounts from $10K to $100M, hiding money in over 70 countries. The back taxes and penalties will not be insignificant.
dryfly wrote: I can hardly wait to talk to my family about that - won't get good inside poop though until the cases close.
I can hardly wait until we find out how many of that 7,500 are current or former elected officials and high profile CEO's.
I read that article as a possible forewarning of Citi preparing to be broken on the crucible of insolvency. One of the TBTF has to be sacrificed to the populist rage.
I disagree. That would endanger the rally, and thus the holiday retail season. I saw the article myself, and think that folks are reading too much into it. If anything is going to derail this bubble, its oil. Oil at 90 or 100 means gas upwards of 3 dollars.
I read that article as a possible forewarning of Citi preparing to be broken on the crucible of insolvency. One of the TBTF has to be sacrificed to the populist rage.
I disagree. That would endanger the rally, and thus the holiday retail season.
Okay - then bust their chops AFTER the market collapses [again]...
I'm essentially doing the same thing using a snowball method. All my credits cards will be paid in six months. Hopefully before any significant rate increases.
I am not convinced that there will be another market collapse. Where would all the liquidity go? Now, gas might cast 3.50 and a cup of coffee $6, but I don't think we'll see another crash, not with this level of printing.
The main difference if McCain/Palin were in there is that Democrats would be calling for Wall Street blood in full-throated fury. Republicans suck at class war against Wall Street and watching conservative politicians denounce bailouts and then oppose banking regulations is sickening. The populist wing of the Democrats is effectively neutered right now. Nobody personally invested in Obama's success is willing to speak up too loudly about the pillaging of our treasury that he's allowing.
So now we're left with the spectacle of Obama and the Fed giving lip service to some minor regulations nobody's going to take seriously. And on the other side we have conservatives who keep trying to apply their free market ideals to what is obviously a fixed game.
It's the folks who self report that are the problem.
That's your view. Personally, I think it's the tax code that's the problem. If that small businessman is paying his sales taxes and property taxes, I tend to think dishonesty is not the problem.
BSR, I recall you saying you purposely keep your income below the minimum taxable level. If that isn't being subsidized, I don't know what is. You enjoy all the protections ( and benefits: VA healthcare) of a system supported by taxation, with none of the expenses. How you can continually complain about such a system baffles me.
As gold goes up, dollar goes down. Oil is probably the next best dollar yardstick.
The ironic problem with oil as a currency is that it is useful: as it gets priced up, it takes the wind out of the economy mighty fast. Gold, having relatively little economic use, can be priced anywhere -- truly "fiat" (declared) in the sense that its value is only as a store of value, the no competing economic use to confuse things.
Personally, I think it's the tax code that's the problem. If that small businessman is paying his sales taxes and property taxes, I tend to think dishonesty is not the problem.
I agree.
How complex does the tax code have to become before expecting people to follow it is considered to be "Denial of substantive due process".
I am not convinced that there will be another market collapse. Where would all the liquidity go? Now, gas might cast 3.50 and a cup of coffee $6, but I don't think we'll see another crash, not with this level of printing.
I hear ya but I would not be surprised to see the market panic again this cycle - especially if it is as levered up as some here have suggested... fear of that leverage going to money heaven could still inspire more than a little 'volatility' and we could be testing last march's lows stat.
Don't know and sure don't recommend market advice but would not surprise me.
Dryfly & Nuke: Just so you know, I filled up my gas tank tonight. The price was $3.119 per gallon of unleaded regular. Arnold really needs the gas tax money. Hope your gas taxes are lower than ours.
Interesting papers popping up on googling the subject of tax non-compliance, the first takeaway for me is this - the non-compliance rate is never observed, only estimated by the intersection of the true non-compliance rate and the detection rate - lots to read out there...
"What has become of this freaking country? I despair, I really do."
We all became rock stars. Gratz on the mini debtor revolt. 50 million of us do it and maybe something would change. Maybe. YouTube - Dire Straits - Money For Nothing
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Thing with Citi is I keep reading article after article of asset sales. The coup de grace was the report they were closing branches and focusing on wealth management. Where is their revenue going to come from? You can read the situation as Citi is backed by the full faith and credit of the US but the mileage is seriously dropping on that guarantee.
Citi has no funds, no future, and no chance of paying back the taxpayer funding. The playbook to date has been to provide taxpayer funding and then go into bankruptcy. Citi will be spectacular in this role.
"Citigroup has received $45 billion in taxpayer TARP funds. In addition, taxpayers are on the hook for the lion’s share of losses on the company’s $335 billion loan portfolio."
Dryfly & Nuke: Just so you know, I filled up my gas tank tonight. The price was $3.119 per gallon of unleaded regular. Arnold really needs the gas tax money. Hope your gas taxes are lower than ours.
They have to be lower than yours - I don't even pay that much for diesel.
Also - love your handle... best ever. You should sell coffee mugs or golf shirts.
Iceland...the 'Nordic Tiger'...
Total systemic failure...collapse cost 85% of GDP...credit lines cancelled...margin calls...domino effect...ponzi game in the stock market...stock market bubble...
'The Icelandic Banking Collapse: A Story of Broken Promises' http://www2.ru.is/lisalib/getfile.aspx?itemid=12748
You totally misunderstood me - one interesting observation was the increased rate of non-compliance between $500K and $1M in income, but decreasing levels above $1M in income - also, the econometric modeling techniques employed to estimate the non-compliance rates...that sort of thing. I don't even have a flow through vehicle to work the system within legal parameters...
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edit: your first partner in every enterprise is Uncle, there simply won't be any property rights without the gov't there...and the whole framework of enforceble contracts etc.
Citi has no funds, no future, and no chance of paying back the taxpayer funding.
IMOP: Citi has been a zombie bank since at least the Walter Wriston era. The zombie bank has been stumbling around the cemetery and falling into open graves every decade or so. When they fall in, everyone has to stop everything and pull them out so we can finish the service for grandma or great-uncle Frank.
I am not convinced that there will be another market collapse. Where would all the liquidity go?
The liquidity will go the same place it went 14 months ago. The constant story of the modern stock market is one of liquidity ebbs and flows. Liquidity has driven the market for 25 years as much as economic growth. But as the Fed has gone from being the regulator of stock market liquidity 25 years ago to the promoter/provider of stock market liquidity today, the ebbs and flows have just gotten bigger.
Always, the liquidity dries up just before the market crashes. All the talk about appetite for risk is one side of the liquidity coin. It means people are leveraging up. The other side is a flight to safety. When the turn comes, everybody wants to be first out the door, and there's a lot of money to be made on the downside, especially by GS and hedge funds. Didn't you learn that last time?
You forgot how much liquidity was there pumping up the market in late 2007 and early 2008?
For 2009, total foreclosures are estimated to be 2.4 million. But coupling state-by-state delinquency rates and foreclosure starts (as reported by the Mortgage Bankers Association) with other data, the CRL projects that for most states, foreclosure totals will more than triple over the coming 4 years, for a total of 8.1 million foreclosures, with only about one in ten of these being saved thanks to court-supervised modifications.
I think the market has a very good chance of tanking again soon. And I think it will be before the holidays, especially because most people don't seem to believe that can happen.
Iceland's collapse - Conclusions...
'What Iceland has to worry about now is unjust redistribution of wealth, corruption, and crony capitalism during the restructuring of the system.'
-Tryggvi Thor Herbertson, Dec 27, 2008, Reykjavik University, RU Institute for Research in Finance & Economics
'The Icelandic Banking Collapse: A Story of Broken Promises'
'What THE UNITED STATES has to worry about now is unjust redistribution of wealth, corruption, and crony capitalism during the restructuring of the system.'
We're going to offer limited partnership interested to Accredited Investors once we straighten out the backoffice paperwork. Our chief asset is the IP contained in our business process patent for turning any activity FUBAR and forcing the populace the shriek WASS! If I can talk Hoops into a cross-licensing agreement, we might offer Hoopdajoops as well.
"When they fall in, everyone has to stop everything and pull them out so we can finish the service for grandma or great-uncle Frank."
Funny but true. Problem is the hole is so freakin' deep noone can see the bottom. Might not be enough dirt to backfill that sucker.
My WAG is everything of value has been siphoned off and it's become a grenade with the pin pulled. Will the taxpayer be able to put the pin back? Should we?
'What THE UNITED STATES has to worry about now is unjust redistribution of wealth, corruption, and crony capitalism during the restructuring of the system.'
Except we haven't even come close to the restructuring phase
Well, what else are they going to do? They are insolvent and borrowing from the house, in a last, vain attempt to break even.
Well, this isn't the way to do it. If Goldman, et al do sky equities--and they get too far out of line-- then the Fed will be forced to raise rates before the real economy has recovered and asset prices will start falling again.
I'll share a little secret. I wait everyday until the market closes to check the numbers for the day. I have a glorious 2 seconds where my wish for a circuit breaker day to be revealed might happen. One day soon that wish will come true. I truly can't stand the level of fraud and corruption that is revealed with the continued rise in the markets. The abuses within the financial system will only change when this happens. Eggs and omelets. g'night
The money printing still doesn't come anywhere close to the rate of ongoing credit destruction.
Their difficulty is that they are not printing money (i.e., currency). They are creating credit which they hope will be borrowed and treated as money. Unfortunately, to create loans, they need willing lenders and willing creditworthy borrowers. Both are in short supply as the economy.
I've been reading Richard Koo's book on Japan's Balance Sheet Recession. (HT: EHP). The parallels with our situation, policy responses, and the reaction of the populace is uncanny.
As soon as I can learn to spell, I might try to create an UberNerd posting of selected passages. I don't know how much I can quote before I have to get Mr. Koo's approval to quote whole sections of his book.
They should reprint the book ASAP. Currently, you have to buy the book used, since it is out of print.
LOL!!! Make a great golf shirt... if tastefully done I could wear it on sales calls and no one would know [except the cubicle monkeys I talk to about designs - they'd be all over it... the suits not so much].
When my oldest played on the worlds worst squirt hockey team... I thought about printing up practice jerseys for them with the Novartis logo and in big letters across the top 'Team Ritalin'... I mentioned that to one of the parents jokingly after a terrible weekend of games [and hotel misbehavior]... parent didn't laugh turned out some 3/4s of the kids were on it or a similar med including the parent I mentioned it to.
rich, Nuke
It's simple, that money that went into emerging markets is going to come back out. Perhaps it will take longer than I expect, but it's a robust answer. On a third note, the Yen is not weak but the Renminbi is very weak, followed closely by to the Mexican Peso, with other undervalued currencies belonging to South Korea, Poland, Hungary, Turkey (from the OECD PPP data)
on another note,
China is the largest importer to the USA ever since August 2008 (Canada had been number one since the start of records, with a lot of that being intermediate production goods)
August 2008
Country Exports Imports Balance Canada 22,075.6 29,994.4 -7,918.8 China 6,201.3 31,823.7 -25,622.4
August 2009
Country Exports Imports Balance
Canada 17,659.3 19,169.1 -1,509.8
China 5,553.1 25,784.7 -20,231.7
Externalized Costs and everyone else who has commented on my little mini-revolt: thank you. In the spirit of things I'd like to remind everyone of a special woman who, along with our gracious male host, made this site the powerhouse that it is. I see bizjournos constantly linking here nowadays, and how long ago was it that those same folks were deriding sites like this and our hosts but surreptitiously reading? How many of them actually slogged through the UberNerd posts completely slackjawed not just at the facts, but the explication of things and the pure beauty of how she made every word tie up the message in the end? I wouldn't be at this point without this place - the authors and commenters.
Thanks to all for the community here; it's priceless.
Straining at gnats whilst swallowing camels?
Criminals following easy money. News at 11!
Finally, the IRS going after the bastards responsible for this mess: the little guys.
wait, I think I saw this movie - the brass walk while the grunts get hung out to dry?
This should be a gooood thread!
Evil government tempting an innocent public ~
The IRS criminal division. Home of accountants who want to think they are cowboys. I would rather have boils on my ass then have them in my life.
wouldn't it be easier to give every man woman and child in america 8000 dollars untaxed? i need me a new gaming pc anyway...
Citi closes gas-linked MasterCards without warning
Citigroup shuts down many MasterCards without warning consumers; letters sent 5 days later
By Eileen Aj Connelly, AP Personal Finance Writer
On 7:17 pm EDT, Monday October 19, 2009
NEW YORK (AP) -- Shannon Burdette tried to pay with her Shell Mastercard after filling up her gas tank this weekend but found the card rejected.
Confused, she called the customer service line on the back of the card, issued by Citibank, and was told the account was closed because of something that appeared on her credit report. But when the Sykesville, Md., resident got a copy of her credit report online, the only negative thing she saw was "closed at credit grantor's request" on the Shell MasterCard account.
Citi closes gas-linked MasterCards without warning - Yahoo! Finance
picosec wrote:
Is it late enough to start talking about PMs again?
Conjure says, "BWAHAHAHA!"
"BWAHAHAHAHA!"
"BWAHAHAHA!
"Say that again!"
"BWAHAHAHA!
Fraud is a policy to prevent prices in housing from dropping frank said.
Just waiting for that quote from his lips
Wall street banksters learned their lesson why not J6PK? (snark)
Nuke wrote:
Too small to defend?
Too minuscule to fear?
Too insignificant to leech?
Too tiny to protect?
Too unimportant to save?
Too unsystematic to acronym?
Armageddon in Alabama Proves Parable for Local U.S. Governments
By Ken Wells
Oct. 19 (Bloomberg) -- In its 190-year history, Jefferson County, Alabama, has endured a cholera epidemic, a pounding in the Civil War, gunslingers, labor riots and terrorism by the Ku Klux Klan. Now this namesake of Thomas Jefferson, anchored by Birmingham, is staring at what one local politician calls financial “Armageddon.”
The spectacle -- a tax struck down, about 1,000 county employees furloughed, a politician indicted over $3 billion in sewer debt that may lead to the largest municipal bankruptcy in history -- has elbowed its way up the ladder of county lore.
“People want to kill somebody, but they don’t know who to shoot at,” says Russell Cunningham, past president of the Birmingham Regional Chamber of Commerce.
Armageddon in Alabama Proves Parable for Local U.S. Governments - Bloomberg.com
yagij wrote:
Not much to say here. I am already 100% in, and so cannot invest any more (won't use margin). My stocks are certificated, and my physical is locked up overseas, so no crooked broker can touch my stash, and if you break into my house, all you can steal is my tin foil hat.
So if an FHA loan defaults within three years, the taxpayer takes the hit but at least they get the 8K credit back.
CR said,
CR - what happens if the buyer is foreclosed and evicted from the house within 3 years?
I have a feeling the IRS might not too much blood back from these turnips.
I dont scrape the data that hard kcoop, stop making me post to "make peace with the establitchment"
yeah, i wrote esta-bitch-ment.
I am your people......but you don't trust me.
someone may have to introduce me.
Oh, my! What a surprise!
Who could have known!?
Oh, my!
Hoocoodanode?
edit:
Russell, I hope you got body armor, buddy, cause I got a feeling that anybody who looks even remotely responsible down there is gonna need it.
Nuke wrote:
.....the FedGov will send the IRS cockroaches into every hole and burrow to retrieve anything with which to feed its growing malodorous body. That would be a job worse than a cop - at least cops get an "atta-boy" once in a while between the heart-felt "I hope you die in your sleep" type comments.
Plantagenet wrote:
I don't have the stuff about my stuff locked up overseas, but I'm mostly positioned like yourself. Now, how do you plan to get overseas if necessary?
yagij wrote:
LOL... Willie Sutton would quite robbing banks if he were alive today - better to rob uncle instead!
Tired of DOW 10,000? Want a glimpse of the future? From my online serial novel of life in America in the near future:
sample
I took a look at the next guy. While I did, Night questioned Josh about DC. "What kind of policies were in effect. Did he hear any news on the way out? Had he heard any news since?" I moved over to the next guy. Like all the others he was White. I would have been happier to have Juan and Jose. They understood life was a bitch, and they knew how to work. Gym muscles were not work muscles. Juan and Jose usually could work the ass off the Josh's of the world. The Josh types would eventually harden up, but I didn't have a year to wait for it. I wouldn't care if they only spoke Spanish. Hell, we could get by on a 50 word vocabulary quite well. Too bad. Juan and Jose weren't around. Josh was.
more?
American Apocalypse
Black Star:
I have known a few cops. Periodically, there are moments when they make a real, positive difference in the lives of their fellow men. Like pulling victims from a car wreck, or preventing physical violence from being perpetrated on another human being. That can almost make up for screwing your neighbor with speed traps or code violations.
No such job satisfaction for IRS agents. Yeah, fork it over unemployed breadwinner. Obamarama needs to fly his entourage to Copenhagen to win real estate deals for cronies.
I would have trouble sleeping at night.
......that reminds me.....did they ever make an arrest in the Census worker found "stuck in the tree"?
“People want to kill somebody, but they don’t know who to shoot at,” says Russell Cunningham, past president of the Birmingham Regional Chamber of Commerce.
Actually, speak of the devil. A&E has a special on cops in Northern CA busting pot growers. What a goddamn waste of taxpayer resources.
Good old American ingenuity in action, it's free money right?
Wake me when they cuff Casey Serin. Until then it's just another
Or be like the US Park Police officer in DC who was planting drugs on his traffic stops to pump up his stats.
The date a home ceased being your principal residence?
Good luck, IRS, proving that.
"On the date a home ceases to be your principal residence, homeowners are required to file form ten-forty FU."
tj,
Casey is going into CRE now. It's the next big thing.
Nuke wrote:
In the later Roman Empire era, criminals served out some punishments by sitting on town councils and being responsible to the government for tax collections. The job had gotten so miserable that no one would willingly serve on the councils responsible for collections, and some over-eager governors would rely on a large selection of corporal and capital punishment for collectors who came up short. Such is the way for such folks.
.
When people start hanging up IRS folks can carve "Fed" in their chest, then we will know how bad it has gotten for the collective whole.
......we had a drinking acquaintance who was an IRS "case-worker" - he lasted about 4-5 years, became a drunk like me, and disappeared....
energyecon wrote:
and once that gnat's nose is under the tent, the camel will take up knitting
Black Star Ranch wrote:
prolly audited a regionally influential hood, maybe someone involved in prostitution, but not kidnapping and slavery
OT on the Education
Front:
More chillin' time for the students. Why not? It isn't like they are going to be working any time soon.
.
Edit: Also just because they aren't in school doesn't mean they cannot still be learning. Unfortunately, it will be up to parents to see to it and not the Public Nannicational System
100,000 suspicious claims....sounds like a lot of people are gambling for
.....the FedGov will send the IRS cockroaches into every hole and burrow to retrieve anything with which to feed its growing malodorous body. - BSR
and this from someone who claims to live below the IRS' radar, whose exemption exists precisely because the IRS is so diligent in its tax collections.
Seems like we should be celebrating $80/bbl oil like we celebrated DOW 10,000.
As I watch the storm troopers in full combat regalia (more than they use in the infantry, by the way) go after dangerous pot heads, I dream of the day when pot is de-criminalized. Most cops I have known were very clear-eyed. I wonder if the Humboldt County drug task force members actually believe the anti-pot rhetoric they spew, or if it is just talking points from on high.
the IRS should send some more agents over to one of Nic Cage's houses.
Nuke wrote:
What is "Blue Shield of Silence"?
Nuke,
They do it because they know what pays for all the cool equipment and training.
If pulling up Grandma's flower bed got grant money for serious goodies they would be rappeling in their rose thorn proof armor at midnight
nova wrote:
Are they any restrictions on who can bid at a police auction of property seized during a drug raid?
yagil:
That's for fellow cops, not saccharine BS from the brass. But I'm sure a career would not be helped by saying: "You know, when we let these dudes grow their weed in the woods, we had no problem. The urban blight came when we forced the grow houses in doors."
nova:
Some no doubt do. However, I have met few people more cynical WRT the War on Drugs than cops.
nova wrote:
Crime pays. Crime prevention pays.
.
Sadly, no crime doesn't pay for anyone that earns a living from said crime.
How's the Barry Bonds case turning out?
Outside the San Francisco federal building that December 2007 morning, dozens of photographers mingled around satellite-TV trucks. A couple of women in bikinis shivered as they tried to take advantage of the scene to advertise the virtues of a vegan lifestyle. Gradually the reporters and lawyers filed into the courtroom for the main event. A dour courtroom artist in a black suit entered with her sketch pad, her pens and pencils hanging around her neck like bad jewelry.
About 8:30 a bald guy strode in from a side door, taking a seat in front. Jeff Novitzky, IRS agent and Barry Bonds’s nemesis, wore a dark suit and looked straight ahead. A few minutes before nine Bonds made his entry. His dark suit was of a better cut than Novitzky’s and hung easily off his broad shoulders. The baseball star chatted and joked with his lead attorney, Michael Rains. Bonds’s legal team was big enough to fill an infield.
Good cops are cynical about people but never the job.
Nuke wrote:
I know of a cop that admitted to a person he was ticketing that he was doing what he was told. His department was behind on a expense account and needed additional revenue to make up the shortfall. The person who got the ticket complained to city hall, and my honest guy ended up working 1st shift/3rd shift rotations for months. Oddly, he had seniority over half the force, and yet, he was the one working odd shifts and getting no O/T. No official reason for his assignments, but he never had the courage again to speak honestly unless he really knew you.
"I hope these people stretching to buy - like the buyer mentioned in the previous post paying 54% of her income for her house, including multiple jobs - realize they have to pay back the entire credit if they don't own and occupy the home for three years."
Yeah, just like all the people who lied on their loan applications will be made to pay all the loans back with interest, on the original terms. It's another massive un
intentional fraud on those who are more responsible.
yagil:
I knew a deputy in Ohio who told me his department didn't go after pot growers because they would end up locking up half the county. They would bust just enough folks (on small amounts) to show the Feds they were serious on the War on Drugs.
Nuke wrote:
Yep. The locals don't want to do it, and they need carrots to do it (Sticks don't work too well sans ripping away the carrots). Take away the federal funding, and I imagine that our local enforcement policies will start making much more sense and being more responsive to the local wants.
.
I could be full of sh*t too.
...his department didn't go after pot growers because they would end up locking up half the county.
In areas where pot growing is rampant, the growers are the local economy.
barfly:
Yeah, this was one of those counties (SE Ohio).
barfly wrote:
Just like Afghanistan! Wait a minute...
I remember the day I was old enough to realize that the cops in my small town in Ohio had grown up there just like I did, and knew exactly who was selling dope just like I did, and they only busted people when they got pissed off or a local politician needed a distraction. Oddly, I don't think most of the dope smokers ever figured that out, at least not until after the first time they went to jail.
albrt wrote:
Pot Smokers of Smallville USA aren't exactly known for being Einsteins. The sad part is that they are rarely a burden to the society around them, and the culture of pot isn't that destructive. Compared to Rural Whiteville's problem with Meth, Pot should be promoted as the drug of choice.
No such job satisfaction for IRS agents. Yeah, fork it over unemployed breadwinner. Obamarama needs to fly his entourage to Copenhagen to win real estate deals for cronies.
I've done that job. The IRS is very lenient with people who truly can't pay, and those people don't give you that much trouble. It's the ones who can pay but just don't want to. Mostly the self-employed type who think they are god's gift to the world, which is what they learn listening to the malcontents on talk radio. They hire people at minimum wage with no benefits so they can live large, and they think they are the backbone of America. They make $80K/year but file tax returns showing $15K income, and then they stiff the govt on that bill if their brat in college needs a new car or whatever. I never lost any sleep over those types. But it is frustrating because there is so so much unpaid taxes, even in good times, and there are not enough people to audit or to collect the taxes. It's a cinch enforcing the Code on the little guy who just has a W-2 and a couple 1099-INTs. It's the folks who self report that are the problem. Kinda like those stated income loans, they are nothing but lies.
And just like the rich they want to trash social security. Since they never pay much into it (benefits based on the income they underreport wouldn't add up to a hill of beans for them), they just as soon ruin it for everyone else. That's how the R's keep the working class self-employed on the side of big business. They both have one dirty little secret in common.
Weed is sold in the relatively wealthy urban areas, and the money is brought back and spent in the poorer rural areas. Shutting down growers severly impacts rural economies. Of course, relying on pot for your economy is a problem, in itself.
barfly wrote:
It worked for Tobacco. I believe Duke University has a history of loving the stuff.
I have family [BIL] in the IRS and a sister who was prosecutor criminal tax at DOJ... you have to seriously F/U to get their attention... either be a visible & intentional tax protester or big money white collar tax cheat to bring DOJ down on your head. My sis did something like 23 trials each and everyone involving $100Ks or millions of dollars in unpaid taxes by well heeled white collar perps - she got 23 convictions. Some did time - all paid hefty fines. Never once did she know of a case where orphan & widows people talk about face DOJ wrath - occasional & unpleasant audits sure - happens. But the heavy hand stuff is almost always directed at intentional evasion or really big money.
The local IRS agents can be persistent and miniature tyrants if not well supervised but their cases don't get kicked upstairs UNLESS there is something really fishy - and only then if there is real money involved & they want to send a message.
She got out of the biz in the first Bush administration [1990] - it was getting more and more political & RICO had just started being used [and abused]. I can only imagine what its like now considering the Obama appointments who had tax issues and didn't even receive a slap on the wrist [that made my very liberal sister livid - taxes really have become for the little people only]...
albrt:
I went to high school in a small town in MA. I had that epiphany moment when a local cop, who was my neighbor, asked me if the kids still smoked up behind the Highland market. When he saw my face, he winked at me.
jussumbody wrote:
Pretty close to what I've seen too... and I'm one of those self-employed. Somebody is gonna pay for the empire... and the Leona Helmsley's sure aren't gonna do it [they said so].
I wouldn't care if they only spoke Spanish. Hell, we could get by on a 50 word vocabulary quite well. Too bad. Juan and Jose weren't around. Josh was.
Diablos! Por favor!
A novel written with a 50-word vocabulary?
I want to see that.
taxes really have become for the little people only...
recently ( as of Oct. 15th), the IRS has drawn in 7,500 tax evaders, in accounts from $10K to $100M, hiding money in over 70 countries. The back taxes and penalties will not be insignificant.
Actually, this sounds like the opening for a pretty good novel.
The back taxes and penalties will not be insignificant.
Enough to pay for a small bank failure?
barfly wrote:
I can hardly wait to talk to my family about that - won't get good inside poop though until the cases close.
Nitey-nite.
I was reading that some tribes of Indians has pyschoactive tobacco, yeah
tobacco, not pot.
I wonder if those strains are still around?
My ad is now for cat vitamins.
Nuke wrote:
Depends on how you define 'pay'... pay as in the net directly received from the fines & back taxes OR the revenue from better 'voluntary' compliance? You don't have to shoot the whole herd to effect a stampede.
I'm prepared to be underwhelmed. The penalties on the few years that get caught will be insignificant compared to the taxes that aren't persued.
My ad has a crying baby and some medicine with a dropper dealy bob that remedies gas, colic and reflux. Smart ass ads by Google!
Plantagenet wrote:
Ha. If you break into my house, all you can steal is my shotgun loaded with buckshot, but you better get to it before I do.
jussumbody wrote:
Depends on if they go civil or criminal - if they go after some of these folks on criminal evasion... its gonna leave a mark. I don't get the feeling they will though - that means making rich people angry. Wouldn't want that.
Keep movin', movin', movin',
Though they're disapprovin',
Keep them doggies movin' Rawhide!
[cracks whip]
A millionaire friend once told me that the wealthy always get the same tax advice -- when pushing the "gray areas" claim all deductions that can only result in a fine, but none that can lead to jail time.
Armageddon in Alabama
Hi-larious! Except if you live there.
Wholesale default across the US...how can this be unavoidable? All levels of government have budgets figured on a stable tax base and 5% unemployment. Now what? Decrease spending but the debt load isn't going away. Default and let the bond holders own the capital improvements? Get wacky like AZ and try and sell your public buildings with a lease back plan? Sell revenue producing infrastructure ala Chicago and their parking meters? Cut government spending to the bone and devolve to Detroit status? FFS Sheer genius surrounds us.
++++
My current favorite sign of collapse:
WW II war bonds
"States suing federal government for unclaimed war bonds
$16.7 billion in certificates has yet to be cashed in. Six states now say that Treasury officials haven't tried to find the bondholders or their descendants, and that states have a right to the money."
States suing federal government for unclaimed war bonds - Los Angeles Times
PetiPAAWS?
The New Pet Health & Wellness Solution?
For Dogs & Cats?
Wellness Solution?
Externalized Costs wrote:
Well sure. You make it sound bad when you say it that way...
From the Alabama article:
The investment banks are screwing over so many, they may end up pissing off the wrong people.
My small town in upstate NY saw its personnel costs nearly double from last year. Health insurance and pension costs were the culprit (contributions to the State pension system increased by 33%). Tax revenue could rise and we would still be in a hole. Of course, it is not rising, but rather falling worse than anticipated. Lots of towns are looking at this fiscal black hole.
TJ and The Bear wrote:
From what my family says he's right - then when caught just go 'awe shucks' and pay... then do it again next year. Happens all the time - it becomes a business calculation.
The real evasion people though aren't gray-liners... believe me... not even close. My sister had a couple real doozies... where the perp was a personal friend of the president, knew the attorney general & big campaign contributor but was discovered to have owed millions. Carefully structured evasion. His crime was so big even his connections wouldn't help him... They nailed him - my sis ran the trial. It was back in the mid-80s.
From Einhorn's paper referenced last thread:
"It is too soon for history to evaluate their (Bernanke/Geitner's) work, because there hasn't been time for the unintended consequences of the 'do whatever it takes' decision-making to materialize."
.
Just put this in the "Boy That Didn't Take Long" file. Stem to stern, we're built for fraud.
ot-henry kissenger on china
The Chinese do not trust America to carry out the great political affairs of the planet well. They find that ideology forms too large a part of the way in which Americans conceive international relations. On the other hand, the Chinese, before this financial crisis, regarded us as serious and reliable people in the fields of finance and the economy. They trusted our model and wished even to imitate it. The violence of the crisis, the irresponsibility shown by the great institutions of Wall Street much surprised and shocked the Chinese. We deeply disappointed them.
Today, they have accepted their losses, but they will never again trust us in financial matters. This is the great change. As they are pragmatic people, they understood it was necessary to manage this crisis in co-operation with us, so as to limit the damage to the real economies of our two countries. They take into account that a very large majority of their immense monetary reserves is in dollars and that their exports of consumer goods to America remain vital to the health of their manufacturing industries. The Chinese leaders managed this crisis in co-operation with their American counterparts during the last twelve months, and they will continue to do it. But nothing will be like before.
7,500 Give Offshore Tax Data to I.R.S. - NY Times
Mike in Long Island, if there is a foreclosure, the homeowners owes the entire tax credit. I wonder if these people realize the risks
best wishes
Bill
FUBAR and WASS LLC wrote:
Uh oh. They think that we are trying to mitigate damage to our real economy?
CR:
Are you turning bearish? Or do you just think the housing recovery chatter has gotten ahead of itself?
My favorite quote from the Jefferson County article was a line from the lead perp spoken at the time he purchased the fatal swaps: “You know, I get the impression that people think a bunch of rubes in Alabama shouldn’t be smart enough to utilize these swaps,” he told Bloomberg News that year.
Bet they had a few chuckles at the JPMorgan Holiday Party reading that line out loud while they raised their bonus checks aloft...
yagij wrote:
We gotta get us one of those!!!
I was at a party last night with many of the Republican faithful who were seriously wondering what it would be like today if McCain and Pailin had won the election. Their impressions were not good.
Elaboration?
barfly:
It would probably be about the same, only the media would be ripping McPalin to shreds right about now.
What does it matter who the puppets are when GS is pulling the strings?
They seemed to be relieved, in hindsight.
barfly wrote:
My GOP friends too. My Dem friends not so much...
It's not like a lot of us here were saying that whomever was elected would be the loser. Hoocoodanode?
TJ and The Bear wrote:
What do you mean? It sure as hell matters to JPM!!!
While I agree wholeheartedly with the Chinese statement about the "irresponsibility shown by the great institutions of Wall Street", being lectured to by them as "too ideological" is pretty rich.
And if: "Today, they have accepted their losses, but they will never again trust us in financial matters.", then they have learned the most valuable lesson possible about financial markets and banks. BTW Hu, what's in your bank's balance sheets?
It would probably be about the same
that we will never know. I personally have my doubts.
McCain would be dead and Moose Mama would have nuked Iran.
barfly:
My guess is there would've been less stimulus, thus less of a short-term boost to the economy. That would have it's benefits. However, on the more important issues (financial reform, etc), I think McCain would be about where Obama is right now. On the bright side, if Palin was VP Saturday Night Live would be far more entertaining.
Yeah, Palin has as much, if not more, comedy potential as Bush ever had. Too bad the world doesn't run on laffs.
we are SO classy. One big classy economy, yeh. McLovin it.
Nuke wrote:
Might have been even more - just different. More tax cuts along w/ some fiscal stimulus. Hard to say - can only live one reality at a time even if they seem surreal at the time.
I am shocked, shocked I tell you, to find fraud going on in this establishment.
For C to be cutting off their gas cards at this point in the "recovery" tells you they are seeing something really scary happening, not only at Citi but in the credit world.
When they just freeze low credit line cards without warning, it doesn't mean they will get paid back all the money they've lent on those cards. They'll probably get paid back millions less. It just freezes their downside on those cards to what they already have lent.
It could be regulators are telling them they have to freeze in place, to hell with the consumer franchise or goodwill. But given the scarcity of credit for many consumers right now, it's not likely. It's probably an internal panic move on their part.
It may be that they see a pattern of ruthless defaults in low credit line consumer cards. People who know their credit is ruined, and don't think it's worth a big bank's time to go after $1,000 owed.
rich wrote:
Do you think C is having trouble raising credit to fund these dicier lines?
dryfly:
Yeah, you're probably right. We wouldn't have gotten C4C, but rather some dumb trickle down capital gain tax cut.
I think that the majority of the cards that Citibank canceled did not have outstanding balances. So called "deadbeat" accounts that are paid in full each month so Citibank is only collecting merchant fees.
"For C to be cutting off their gas cards at this point in the "recovery" tells you they are seeing something really scary happening, not only at Citi but in the credit world."
If you need to cut credit lines, once you cut the inactive cards, the next place to cut are the "co-branded" cards - with the revenue shares to the co-branding partner (Shell, etc.), these are lower profit cards to the bank issuer. Plus underwriting standards for co-branded cards tend to be looser. On the gas cards, cardholders usually get them to just get the cash rebate on the gas purchases, and don't tend to use them much for other purchases. Not surprised Citi is reducing gas co-brand programs.
Nuke, if McPalin had won, they would have been saddled with Dem control of both houses. They wouldn't have gotten far.
barfly:
That sounds like a plus to me. Seeing what our betters hath wrought makes me pine for some old fashioned grid lock.
Bonnie Speedy? I believe anything that comes from a woman with a porn name.
I won't be surprised to see Congress pass an amendment to the IRC that forgives a credit recapture for those folks who lose the home to foreclosure.
BTW, oil is at 80.05 in Asian trading.
CL08XE Future Quote - Crude Oil Lt Sweet Electronic (Nymex) Future Quote - CL08XE Quote - CL08XE Future Price
Citi makes limited decisions without consulting the dream economic team. I read that article as a possible forewarning of Citi preparing to be broken on the crucible of insolvency. One of the TBTF has to be sacrificed to the populist rage.
Still trying to figure how they are going to make Saudi Prince Alwaleed bin Talal whole from his investment. Maybe GS will issue him some preferred stock, he wouldn't fall for the 10 year t-bill offer.
maybe next time, nuke. That's the beauty of the system.
CalculatedRisk wrote:
Probably be as effective as trying to win a deficiency judgment... though taxes owed are not forgiven even in bankruptcy and IRS can garnish future wages.
I don't know if you caught Einhorn's comment that he views gold as being a currency that looks more attractive than any of the other major currencies in the world, all of which are weak. This is what several of us here have been trying to say, too, although some people still don't seem to understand it.
When I challenge people who say "the dollar will rally" to say what it will rally vs., this is what I'm trying to get across. The yen and yuan are artificially weak. The euro is going to get weaker. So, they aren't a good frame of reference for dollar strength or weakness. Gold price tells you most of what you need to know about dollar strength or weakness. The relationship is directly inverse. As gold goes up, dollar goes down. Oil is probably the next best dollar yardstick.
Hi CR folks... couple/three things real quick.
1. Notarized 401(k) cashout is in the mail - should be a few weeks.
2. Next step: remove BofA account and cash into smaller, local bank.
3. Co-worker went to credit card default court last Monday and 10 of 150 defaulters showed up for the event.
4. Just received notice today that another CC, all paid on time/etc., is going to 29.99% rate.
I'm pulling it all out, paying it all off, and I hope these bastards suck wind long and hard before they die.
I've talked long about doing it but it's now in motion. Hey Ken Lewis, et. al. - suck my balones!!!
Have fun without my cash to play with, you arseholes. Oh, and about those 3 new "for rent" and 5 "for sale" signs in my hood - good luck getting your money back cuz you idiots loaned to jackarses who can not and will not ever pay you back.
What has become of this freaking country? I despair, I really do.
....no, my "exemption exists" because it's pretty tough to suck water from a rock.
....wait till it reaches $140 again. Thank goodness I have a horse.....
barfly wrote:
recently ( as of Oct. 15th), the IRS has drawn in 7,500 tax evaders, in accounts from $10K to $100M, hiding money in over 70 countries. The back taxes and penalties will not be insignificant.
dryfly wrote: I can hardly wait to talk to my family about that - won't get good inside poop though until the cases close.
I can hardly wait until we find out how many of that 7,500 are current or former elected officials and high profile CEO's.
I read that article as a possible forewarning of Citi preparing to be broken on the crucible of insolvency. One of the TBTF has to be sacrificed to the populist rage.
I disagree. That would endanger the rally, and thus the holiday retail season. I saw the article myself, and think that folks are reading too much into it. If anything is going to derail this bubble, its oil. Oil at 90 or 100 means gas upwards of 3 dollars.
Art Eclectic wrote:
Me too.
Nuke wrote:
Okay - then bust their chops AFTER the market collapses [again]...
I'm essentially doing the same thing using a snowball method. All my credits cards will be paid in six months. Hopefully before any significant rate increases.
dryfly:
I am not convinced that there will be another market collapse. Where would all the liquidity go? Now, gas might cast 3.50 and a cup of coffee $6, but I don't think we'll see another crash, not with this level of printing.
The main difference if McCain/Palin were in there is that Democrats would be calling for Wall Street blood in full-throated fury. Republicans suck at class war against Wall Street and watching conservative politicians denounce bailouts and then oppose banking regulations is sickening. The populist wing of the Democrats is effectively neutered right now. Nobody personally invested in Obama's success is willing to speak up too loudly about the pillaging of our treasury that he's allowing.
So now we're left with the spectacle of Obama and the Fed giving lip service to some minor regulations nobody's going to take seriously. And on the other side we have conservatives who keep trying to apply their free market ideals to what is obviously a fixed game.
jussumbody wrote:
That's your view. Personally, I think it's the tax code that's the problem. If that small businessman is paying his sales taxes and property taxes, I tend to think dishonesty is not the problem.
BSR, I recall you saying you purposely keep your income below the minimum taxable level. If that isn't being subsidized, I don't know what is. You enjoy all the protections ( and benefits: VA healthcare) of a system supported by taxation, with none of the expenses. How you can continually complain about such a system baffles me.
rich wrote:
The ironic problem with oil as a currency is that it is useful: as it gets priced up, it takes the wind out of the economy mighty fast. Gold, having relatively little economic use, can be priced anywhere -- truly "fiat" (declared) in the sense that its value is only as a store of value, the no competing economic use to confuse things.
some investor guy wrote:
I agree.
How complex does the tax code have to become before expecting people to follow it is considered to be "Denial of substantive due process".
Nuke wrote:
I hear ya but I would not be surprised to see the market panic again this cycle - especially if it is as levered up as some here have suggested... fear of that leverage going to money heaven could still inspire more than a little 'volatility' and we could be testing last march's lows stat.
Don't know and sure don't recommend market advice but would not surprise me.
Oxtail wrote:
Almost like it was an accident huh?
Lothar, congrats! I fired BofA a few months ago and it was one of the most liberating experiences ever.
some investor guy wrote:
As a small biz guy - me too.
Dryfly & Nuke: Just so you know, I filled up my gas tank tonight. The price was $3.119 per gallon of unleaded regular. Arnold really needs the gas tax money. Hope your gas taxes are lower than ours.
Interesting papers popping up on googling the subject of tax non-compliance, the first takeaway for me is this - the non-compliance rate is never observed, only estimated by the intersection of the true non-compliance rate and the detection rate - lots to read out there...
dryfly and tj finding common ground
" What does it matter who the puppets are when GS is pulling the strings? "
"What do you mean? It sure as hell matters to JPM!!! Wink "
agreed...different puppet master...same play
FUBAR:
On Friday in upstate NY it was 2.45. This afternoon it was 2.69. I am curious to see the price tomorrow afternoon (shiftwork) as I drive into work.
"What has become of this freaking country? I despair, I really do."
We all became rock stars. Gratz on the mini debtor revolt. 50 million of us do it and maybe something would change. Maybe.
YouTube - Dire Straits - Money For Nothing
++++
Thing with Citi is I keep reading article after article of asset sales. The coup de grace was the report they were closing branches and focusing on wealth management. Where is their revenue going to come from? You can read the situation as Citi is backed by the full faith and credit of the US but the mileage is seriously dropping on that guarantee.
Citi has no funds, no future, and no chance of paying back the taxpayer funding. The playbook to date has been to provide taxpayer funding and then go into bankruptcy. Citi will be spectacular in this role.
"Citigroup has received $45 billion in taxpayer TARP funds. In addition, taxpayers are on the hook for the lion’s share of losses on the company’s $335 billion loan portfolio."
FUBAR and WASS LLC wrote:
They have to be lower than yours - I don't even pay that much for diesel.
Also - love your handle... best ever. You should sell coffee mugs or golf shirts.
I know you're not proposing non-compliance, but don't even go there, to the non-compliance issue.
That's crazy. It's not worth talking about unless you've got a death wish.
im seeing a day when the sign in the window says
"this washer dryer pair for $3,899.99 or 1 ounce gold eagle" ( or maple, kruger etc)
Iceland...the 'Nordic Tiger'...
Total systemic failure...collapse cost 85% of GDP...credit lines cancelled...margin calls...domino effect...ponzi game in the stock market...stock market bubble...
'The Icelandic Banking Collapse: A Story of Broken Promises'
http://www2.ru.is/lisalib/getfile.aspx?itemid=12748
mp,
You totally misunderstood me - one interesting observation was the increased rate of non-compliance between $500K and $1M in income, but decreasing levels above $1M in income - also, the econometric modeling techniques employed to estimate the non-compliance rates...that sort of thing. I don't even have a flow through vehicle to work the system within legal parameters...
.
edit: your first partner in every enterprise is Uncle, there simply won't be any property rights without the gov't there...and the whole framework of enforceble contracts etc.
From Einhorn's presentation:
I like that line. That's good.
test
mp:
I read the speech in its entirety. I really enjoyed it. He's like Denninger without, you know, the insanity and drooling.
OR THE CAPS 'N LARGE FONT!
I'm glad I did misunderstand. We got audited once and I pray to God it never happens again.
We came through it OK, but it was a long drink.
that's a
, right? it means recovery is just around the corner?
Externalized Costs wrote:
IMOP: Citi has been a zombie bank since at least the Walter Wriston era. The zombie bank has been stumbling around the cemetery and falling into open graves every decade or so. When they fall in, everyone has to stop everything and pull them out so we can finish the service for grandma or great-uncle Frank.
Well, it's a
somewhere...
The liquidity will go the same place it went 14 months ago. The constant story of the modern stock market is one of liquidity ebbs and flows. Liquidity has driven the market for 25 years as much as economic growth. But as the Fed has gone from being the regulator of stock market liquidity 25 years ago to the promoter/provider of stock market liquidity today, the ebbs and flows have just gotten bigger.
Always, the liquidity dries up just before the market crashes. All the talk about appetite for risk is one side of the liquidity coin. It means people are leveraging up. The other side is a flight to safety. When the turn comes, everybody wants to be first out the door, and there's a lot of money to be made on the downside, especially by GS and hedge funds. Didn't you learn that last time?
You forgot how much liquidity was there pumping up the market in late 2007 and early 2008?
From Hussman today (sorry if already posted):
I think the market has a very good chance of tanking again soon. And I think it will be before the holidays, especially because most people don't seem to believe that can happen.
Iceland's collapse - Conclusions...
'What Iceland has to worry about now is unjust redistribution of wealth, corruption, and crony capitalism during the restructuring of the system.'
-Tryggvi Thor Herbertson, Dec 27, 2008, Reykjavik University, RU Institute for Research in Finance & Economics
'The Icelandic Banking Collapse: A Story of Broken Promises'
Nuke,
I'm convinced. The money printing still doesn't come anywhere close to the rate of ongoing credit destruction. This market is going DOWN.
merchants of fear wrote:
there. fixed it for ya.
Yah
Can't we be more precise.
Can't we say "the money isn't hitting the streets because the banks aren't loosening up on credit?"
I mean, that's the problem.
The banks are holding on to the money even while they're tightening credit.
And the banks don't buy toaster ovens, gasoline, ....
dryfly wrote:
We're going to offer limited partnership interested to Accredited Investors once we straighten out the backoffice paperwork. Our chief asset is the IP contained in our business process patent for turning any activity FUBAR and forcing the populace the shriek WASS! If I can talk Hoops into a cross-licensing agreement, we might offer Hoopdajoops as well.
FW
"When they fall in, everyone has to stop everything and pull them out so we can finish the service for grandma or great-uncle Frank."
Funny but true. Problem is the hole is so freakin' deep noone can see the bottom. Might not be enough dirt to backfill that sucker.
My WAG is everything of value has been siphoned off and it's become a grenade with the pin pulled. Will the taxpayer be able to put the pin back? Should we?
Norv Turner for Treasury Sec...
mp wrote:
Riight. It's not the outrageous, unsustainable levels of debt held by TBTF at all. It is the lack of access to credit... /s
I agree with Nuke on market because they are going to print $ until the system collapses within itself..stars burn brightest before they burn out.....
Barfly-nice thread music..hadn't heard that song in years...
Where that high-powered money is going, though, is into the stock market. IMO, there's no doubt about that.
We've got some banks playing the market with taxpayer money.
markets compound at 1% a day for the rest of the year and Dow will hit 30k. to the moon, mp!
Goodnight all. Some parting thoughts:
Orient Overseas 3Q shipping volume off 16.7% - MarketWatch
'What THE UNITED STATES has to worry about now is unjust redistribution of wealth, corruption, and crony capitalism during the restructuring of the system.'
Except we haven't even come close to the restructuring phase
"do you know what it takes to sell real estate? it takes brass ballz!"
YouTube - Leadership - Glengarry Glen Ross
....and an 8000 dollar tax credit!
Oh, I've said here before they'd try to sky it.
And they are.
Wasn't that long ago that Wall Street claimed that there was no way the market could go down in the face of virtually limitless liquidity.
The koolaid was truly world-class, wasn't it?
mp wrote:
Well, what else are they going to do? They are insolvent and borrowing from the house, in a last, vain attempt to break even.
Markar wrote:
are you absolutely sure about that?
Blackhalo wrote:
break even? BREAK EVEN??? hahahahaha!!! They're doing more than breaking even!
/sigh
Well, this isn't the way to do it. If Goldman, et al do sky equities--and they get too far out of line-- then the Fed will be forced to raise rates before the real economy has recovered and asset prices will start falling again.
Then we're in worse shape than before.
mp wrote:
Every day current economic policies are continued we're in worse shape than the day before. You're only discussing an acceleration of the decline.
@RockyR
Restructuring can't come soon enough but the whole thing will have to collapse before it happens
And what I said just above goes back to other previous comments I've made about the need for banking reform.
Those guys should have been neutered so that something like what is developing now wouldn't have been possible.
The situation could have been managed if they'd seized the damned banks.
Now, it's just an enormous cluster****, and the investment banks are calling the shots because Washington isn't.
I'll share a little secret. I wait everyday until the market closes to check the numbers for the day. I have a glorious 2 seconds where my wish for a circuit breaker day to be revealed might happen. One day soon that wish will come true. I truly can't stand the level of fraud and corruption that is revealed with the continued rise in the markets. The abuses within the financial system will only change when this happens. Eggs and omelets. g'night
Ah, used to be able to get a pack of camel lights for less than that at the A+ on Broadway.
mp quoted:
Their difficulty is that they are not printing money (i.e., currency). They are creating credit which they hope will be borrowed and treated as money. Unfortunately, to create loans, they need willing lenders and willing creditworthy borrowers. Both are in short supply as the economy.
I've been reading Richard Koo's book on Japan's Balance Sheet Recession. (HT: EHP). The parallels with our situation, policy responses, and the reaction of the populace is uncanny.
As soon as I can learn to spell, I might try to create an UberNerd posting of selected passages. I don't know how much I can quote before I have to get Mr. Koo's approval to quote whole sections of his book.
They should reprint the book ASAP. Currently, you have to buy the book used, since it is out of print.
FW
LOL!!! Make a great golf shirt... if tastefully done I could wear it on sales calls and no one would know [except the cubicle monkeys I talk to about designs - they'd be all over it... the suits not so much].
When my oldest played on the worlds worst squirt hockey team... I thought about printing up practice jerseys for them with the Novartis logo and in big letters across the top 'Team Ritalin'... I mentioned that to one of the parents jokingly after a terrible weekend of games [and hotel misbehavior]... parent didn't laugh turned out some 3/4s of the kids were on it or a similar med including the parent I mentioned it to.
Still would make a great team jersey...
externalized costs wrote "...problem is the hole is so freakin' deep none can see the bottom....)
exactly...a big black hole...just like in astronomy...will suck in all matter (money) proximate and available only to increase the appetite for more
as is widely known at this site, this problem involves the creation of an infinite amount of toxic garbage that was securitized and sold to the world
thus destroying our credibility and soon, our currency
gov should have opened a 'bank of the united states of america" and loaned money directly to responsible businesses and individuals
by-passing the insolvent banks and as they failed and then taking them into receivership
but alas it may be...probably is too late for this
hold on tight...we're goin in
heres a test
a major indicator of this being so...
if gasoline goes to $4 per gallon plus while world trade languishes and our gdp is flat
Just read Kunstler's latest missive.
I must say... had a right-wing pundit made the remarks that he does the hue and cry from the left would be deafening.
rich, Nuke
It's simple, that money that went into emerging markets is going to come back out. Perhaps it will take longer than I expect, but it's a robust answer. On a third note, the Yen is not weak but the Renminbi is very weak, followed closely by to the Mexican Peso, with other undervalued currencies belonging to South Korea, Poland, Hungary, Turkey (from the OECD PPP data)
on another note,
China is the largest importer to the USA ever since August 2008 (Canada had been number one since the start of records, with a lot of that being intermediate production goods)
August 2008
Country Exports Imports Balance
Canada 22,075.6 29,994.4 -7,918.8
China 6,201.3 31,823.7 -25,622.4
August 2009
Country Exports Imports Balance
Canada 17,659.3 19,169.1 -1,509.8
China 5,553.1 25,784.7 -20,231.7
Externalized Costs and everyone else who has commented on my little mini-revolt: thank you. In the spirit of things I'd like to remind everyone of a special woman who, along with our gracious male host, made this site the powerhouse that it is. I see bizjournos constantly linking here nowadays, and how long ago was it that those same folks were deriding sites like this and our hosts but surreptitiously reading? How many of them actually slogged through the UberNerd posts completely slackjawed not just at the facts, but the explication of things and the pure beauty of how she made every word tie up the message in the end? I wouldn't be at this point without this place - the authors and commenters.
Thanks to all for the community here; it's priceless.
I hope I got pigged while writing this.
@Lothar
Did you see Jesse's essay on preparation?
MP, no, but I'll check. I'm flattered you replied to me. I respect your opinions and positions so much.