. SouthAmerica: Reply to Cesko Some of the Broadway Shows are also very good. But the reality is for most people from around the world when they think about the United States the first thing that comes to mind it is the Hollywood movies. And the most famous Americans are: Al Capone Billy the Kid Jesse James General Custer Mickey Mouse and for the new Generation the most famous Americans are: Batman and Spider Man. .
. August 27, 2008 SouthAmerica: Reply to ljmlmvlhk You said on your posting: ââ¦.well I think a lot of what southamerica says makes sense. Some ET members remind me of pack animals, when the momentum is against someone, others feel the need to jump on the bandwagon to clamor, other than that, they are too spineless to make a call against the prevailing ET âcrowdâ.â And one more time you were right. They erased my posting from this forum and I am laughing because I realized how pathetic these people are. If you read some of the information on these threads you might understand what is happening in Brazil. http://www.brazzil.com/articles/195...of-amazon-indians-vs-landowners.html#comments ***** Reply to Joao da Silva written by Ricardo C. Amaral, August 17, 2008 http://www.brazzil.com/articles/195-august-2008/10091-where-is-brazils-barack-obama.html .
. August 28, 2008 SouthAmerica: Reply to ljmlmvlhk By the way, the Brazilian Supreme Court suspended yesterday the case that would have created an explosive situation in Brazil. .
. September 6, 2008 SouthAmerica: Reply to ljmlmvlhk I am back on this forums, my account on Elite Trader had been disabled about one week ago because of my last posting about the Paradigm Shift. Since then I moved the discussion about that subject to the PBS website under the forum for the âWashington Weekâ television program. In this political season that subject probably would be more appropriate to be discussed at the Washington Week program website anyway. In the future I will scale down my postings here on Elite Trader since I donât want to abuse Baron Robertsonâs welcome to his website. Since I started writing articles about China and Brazil the daily readership of Brazzil magazine went from nil just a few years ago to the current 44 percent of the people who access that magazine on a daily basis. And over 50 percent of the readers of that magazine come from Asia including people from Japan, Taiwan, India, and Singapore. The Asians are very interested in Brazil as a place for potential investments and as a vacation place. Some of the Asian readers asked me to write articles and participate on some of the major Asian News and business websites, and since Asia is becoming more important to Brazil than the United States it makes sense for me to concentrate in that market. I have been aware for a long time that the United States is disconnecting from Brazil and South America I have had direct experience in that area for the last 30 years â and I know that the disconnection has picked up pace in the last few years. By the way, when the readership of Brazzil magazine from readers from China was nil, the readership from the United States was over 50 percent. Today the readership from the US accounts for only 26 percent of the daily readers of that magazine. That switch in audience happened very fast. The debate regarding my last article about the Renationalization of Petrobras still going on after the article being published for 2 months â and someone suggested on his posting that he like to see a program in Brazil to teach Brazilians to speak and write English. That was a posting in response to someone who posted stuff in a very broken English that we could barely understand what that person was trying to say. Then the fellow who knows very little English answered back who told you that I want to learn English he said, I want to learn something useful for my business career I want to learn Chinese. And he wants that the Brazilian government help Brazilians to learn Chinese. .
. September 6, 2008 SouthAmerica: When I was reading this article on The New York Times yesterday I felt sorry for the Chinese since they are holding a ton of US dollar investments and they donât have anyone interested to buy it from them even if they decide to dump the stuff. They are learning the hard way that it looks like they got caught holding the bag just like a lot of other foreigners. Finally the Chinese started realizing what is going on and right now they are feeling like suckers. ***** âMain Bank of China Is in Need of Capitalâ By Keith Bradsher The New York Times September 5, 2008 on page C1 of the New York edition. HONG KONG â Chinaâs central bank is in a bind. It has been on a buying binge in the United States over the last seven years, snapping up roughly $1 trillion worth of Treasury bonds and mortgage-backed debt issued by Fannie Mae and Freddie Mac. Those investments have been declining sharply in value when converted from dollars into the strong yuan, casting a spotlight on the central bankâs tiny capital base. The bankâs capital, just $3.2 billion, has not grown during the buying spree, despite private warnings from the International Monetary Fund. Now the central bank needs an infusion of capital. Central banks can, of course, print more money, but that would stoke inflation. Instead, the Peopleâs Bank of China has begun discussions with the finance ministry on ways to shore up its capital, said three people familiar with the discussions who insisted on anonymity because the subject is delicate in China. The central bankâs predicament has several repercussions. For one, it makes it less likely that China will allow the yuan to continue rising against the dollar, say central banking experts. This could heighten trade tensions with the United States. The Bush administration and many Democrats in Congress have sought a stronger yuan to reduce the competitiveness of Chinese exports and trim the American trade deficit. The central bank has been the main advocate within China for a stronger yuan. But it now finds itself increasingly beholden to the finance ministry, which has tended to oppose a stronger yuan. As the yuan slips in value, Chinaâs exports gain an edge over the goods of other countries. The two bureaucracies have been ferocious rivals. Accepting an injection of capital from the finance ministry could reduce the independence of the central bank, said Eswar S. Prasad, the former division chief for China at the International Monetary Fund. âCentral banks hate doing that because it puts them more under the thumb of the finance ministry,â he said. Mr. Prasad said that during his trips to Beijing on behalf of the I.M.F., he had repeatedly cautioned China over the enormous scale of its holdings of American bonds, emphasizing that it left China vulnerable to losses from either a strengthening of the yuan or from a rise in American interest rates. When interest rates rise, the prices of bonds fall. Officials at the central bank declined to comment, while finance ministry officials did not respond to calls or questions via fax seeking comment. Data in a study by the Bank of International Settlements based in Basel, Switzerland, sometimes called the central bank for central banks, shows that many central banks had small capital bases relative to foreign reserves at the end of 2002, though few were as low as the Peopleâs Bank of China. Given the poor performance of foreign bonds, the Chinese government could decide to shift some of its foreign exchange reserves into global stock markets. The central bank started making modest purchases of foreign stocks last winter, but has kept almost all of its reserves in bonds, like other central banks. The finance ministry, however, has pushed for investments in overseas stocks. Last year, it wrested control of the $200 billion China Investment Corporation, which had been bankrolled by the central bank. That corporationâs most publicized move, a $3 billion investment in the Blackstone Group in May of last year, has lost more than 43 percent of its value. The central bankâs difficulties do not, by themselves, pose a threat to the economy, economists agree. The government has ample resources and is running a budget surplus. Most likely, the finance ministry would simply transfer bonds of other Chinese government agencies to the bank to increase its capital. But even in a country that strongly discourages criticism of its economic policies, hints of dissatisfaction are appearing over Chinaâs foreign investments. For instance, a Chinese blogger complained last month, âIt is as if China has made a gift to the United States Navy of 200 brand new aircraft carriers.â Bankers estimate that $1 trillion of Chinaâs total foreign exchange reserves of $1.8 trillion are in American securities. With aircraft carriers costing up to $5 billion apiece, $1 trillion would, in theory, buy 200 of them. By buying United States bonds, the Chinese government has been investing a large chunk of the countryâs savings in assets earning just 3 percent annually in dollars. And those low returns turn into real declines of about 10 percent a year after factoring in inflation and the yuanâs appreciation against the dollar. The yuan has risen 21 percent against the dollar since China stopped pegging its currency to the dollar in July 2005. The actual declines in value of the central bankâs various investments are a carefully guarded state secret. Still China finds itself hemmed in. If it were to curtail its purchases of dollar-denominated securities drastically, the dollar would likely fall and American interest rates could soar. China spent more than one-eighth of its entire economic output last year on foreign bonds, and then picked up the pace during the first half of this year. Chinese officials have suggested in recent comments that they are increasingly interested in stopping the yuanâs rise, and thus are willing to continue buying foreign securities to support the dollar. In fact, the yuan weakened slightly against the dollar last month after 26 consecutive months of gains. Along with Treasuries, China has invested heavily in mortgage-backed bonds from Fannie Mae and Freddie Mac, the struggling mortgage finance giants that are sponsored by the United States government. Standard & Poorâs estimates Chinaâs holdings at $340 billion. Some bond traders suspect that the central bank has scaled back its purchases of these securities, as have Chinaâs commercial banks. But the central bank trades this debt through many third parties in many countries, making its activity opaque to outside analysts. The central bank has gone to great lengths to maintain its foreign purchases. The money to buy foreign bonds has come from the reserves required that commercial banks must deposit with the central bank. In effect, Chinaâs commercial banks have been lending the central bank more than $1 trillion at an interest rate of less than 2 percent. To keep the banks strong when they were getting such little interest on their reserves, the central bank has kept deposit rates low. The gap between what banks are paying on deposits and the rates they are charging ordinary customers to borrow is several percentage points. This amounts to a transfer of wealth from ordinary Chinese savers to the central bank and on to Americans who are selling their debt to the Chinese. The central bank is now under considerable pressure to reduce the commercial banksâ reserve requirements to encourage growth as the Chinese economy shows signs of slowing. Victor Shih, a specialist in Chinese central banking at Northwestern University, said that when he visited the Peopleâs Bank of China for a series of meetings this summer, he was surprised by how many officials resented the institutionâs losses. He said the officials blamed the United States and believed the controversial assertions set forth in the book âCurrency War,â a Chinese best seller published a year ago. The book suggests that the United States deliberately lured China into buying its securities knowing that they would later plunge in value. âA lot of policy makers in China, at least midlevel policy makers, believe this,â Mr. Shih said. Source: http://www.nytimes.com/2008/09/05/b...n.html?_r=1&scp=4&sq=China&st=cse&oref=slogin .
. September 6, 2008 SouthAmerica: Here is another lesson from the United States to the rest of the world about how a Free Market Economy really works. ***** âU.S. to take control of Fannie and Freddieâ By Glenn Somerville and Al Yoon Reuters - Sat Sep 6, 2008 WASHINGTON/NEW YORK (Reuters) - The U.S. government plans to put government sponsored mortgage finance companies Fannie Mae and Freddie Mac under federal control, the New York Times and Washington Post newspapers reported late Friday, in what could be the largest financial bailout in the nation's history. The two government sponsored enterprises (GSEs) own or guarantee almost half of the country's $12 trillion in outstanding home mortgage debt. The Wall Street Journal reported earlier on Friday that the U.S. Treasury Department is close to finalizing a plan to restructure the two companies that includes changes to their senior management. The plan could be announced as early as this weekend, the Journal said. U.S. Treasury spokeswoman Brookly McLaughlin declined to comment on the Journal report on Friday. Fannie Mae and Freddie Mac spokesmen also declined to comment. The Federal Reserve, which earlier this year gave both companies the right to borrow from its discount window if necessary, declined comment also. The two firms would be placed in "conservatorship", the Washington Post said, citing sources familiar with the discussions. The value of the company's common stock would be diluted but not wiped out, while the holdings of other securities, including company debt and preferred shares, would be protected by the government, the Washington Post said. Senior Bush administration and Federal Reserve officials called in top executives of Fannie Mae and Freddie Mac on Friday and told them that the government was preparing to place the two companies under federal control, officials and company executives told the New York Times. Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson were present at meetings with James Lockhart, the director of the Federal Housing Finance Agency, the regulator of the two companies, and with Fannie Mae CEO Daniel Mudd and Freddie Mac CEO Richard Syron on Friday, Reuters can confirm. There were separate meetings with the two CEOs. The executives were told they and their boards would be replaced and shareholders value diluted, but the companies would be able to continue functioning with the government generally standing behind their debt, the New York Times said. Daniel H. Mudd, chief executive of Fannie Mae, and Richard Syron, his counterpart at Freddie Mac, are expected to step down from their posts eventually, the Wall Street Journal reported. Earlier, McLaughlin had told Reuters the department was "making progress on our work" with Morgan Stanley, the Federal Housing Finance Agency, and the U.S. Federal Reserve. The U.S. Treasury had hired Morgan Stanley on August 5 to advise it on whether the companies were adequately capitalized and help it determine how it would use its new powers to support the GSEs. An emergency plan approved by Congress in late July gave Treasury the authority to offer an undetermined amount of credit to the two companies, or take an equity stake in them if they ran into trouble. The housing legislation signed into law by President George W. Bush in July requires the companies agree to a Treasury backstop. Shares of the two government sponsored enterprises (GSEs)have plunged about 80 percent since mid-May this year as the U.S. housing market slump resulted in the two companies reporting about $14 billion in losses in the past four quarters, eroding some of their capital. "People have priced in an equity infusion that would wipe out shareholders," said Chuck Gabriel, managing director at Washington-based consultants Capital Alpha Partners. "On the other hand, they have come to understand you wouldn't have such an event without the GSEs agreeing to it." Financial markets have come to expect that an investment by the U.S. Treasury would explicitly back the companies' $1.6 trillion in debt, but leave their shares nearly valueless. The Wall Street Journal, citing people familiar with the matter, said the plan was expected to involve the creative use of authority the Treasury won from the U.S. Congress to pump capital into the two government-sponsored enterprises if it believed it was necessary. Instead of giving each company a big capital infusion up front, the government plans to make quarterly infusions as the companies' losses warrant, sources told the Washington Post late Friday. This would be an attempt to minimize the initial cost of the rescue, the paper said. Shares of Fannie Mae and Freddie Mac, which had rebounded since August 21 on speculation a government intervention might be averted, plunged in after-hours trading in New York on Friday. Fannie Mae stock fell 16.9 percent to $5.85, while Freddie's shares declined 7 percent to $4.74. Analysts at Citigroup, Merrill Lynch, and Goldman Sachs since mid-August have issued reports saying the companies had plenty of capital to operate for the near term, and both companies have successfully rolled over debt on schedule in the meantime. Yield spread premiums on the companies' senior debt narrowed as traders bet government funding would cut their risks. However, the major credit rating companies since August 22 all cut their ratings on preferred stock of the two GSEs on expectations that the share price declines had cut access to capital, increasing the need for emergency financial support. The companies never lost their access to capital markets where they raise money to support the U.S. housing market, but the biggest buyers of the debt have grown more cautious. Foreign central banks reduced their holdings of "federal agency" debt in custody at the Federal Reserve in the past week for the seventh week in a row. Russia has continued reducing its holdings of agency debt, Alexei Ulyukayev, first deputy chairman of Russia's central bank, said on Friday. The U.S. Congress created Fannie Mae as a government agency in 1938, during the Great Depression, to buy government-insured mortgages from lenders, providing them fresh money to make more loans. Fannie continued to function as a government-run agency during the 1940s and 1950s, even as it took steps toward privatization. In 1968, President Lyndon Johnson decided to turn Fannie into a shareholder-owned company. Source: http://www.reuters.com/article/newsOne/idUSN0527801420080906 .
He can hate the United States all he wants for all I care, as long as he continues to post information which I find useful (which he does), I really could care less..I'll read it.
The stuff on Freddie Mac and Fannie is absolutely true... no denying that. In all fairness, it could be viewed from many different stances - but I think the facts would still remain. If most investment comes from overseas - it stinks badly... Hopefully investors will wise up.
. September 7, 2008 SouthAmerica: "September 7" is a very important date in Brazil â It is a national holiday when Brazilians commemorate âIndependence Day.â September 7, 2008 is becoming a very important date for Americans as well â It is the date they will commemorate âDependence Dayâ for years to come. That is the day that American free market capitalism made official and declared its dependence on US government bailouts. And US taxpayers dollars became the main source of capital to keep the US financial system and the US economy afloat. The US economy has become in a short period of time the largest âSocialist economyâ in the world and today taxpayers money supports not only social programs, but also serve as the lifeline of last resort to keep its entire financial system afloat. Next in line for a US government bailout is the 3 major car auto makers in the US and every airline in sight - after that just God knows what is coming in the pipeline. When I was reading about the US government nationalization of Fannie and Freddie I was wondering what Sir John M. Templeton would say about it. Probably he would say: âhow did we let things get so out of hand to get to this breaking point. Thatâs a disgrace!â ******* Fannie, Freddie Capital Concerns Prompt Paulson to Take Control. By Dawn Kopecki and Alison Vekshin Bloomberg News â September 7, 2008 Sept. 7 (Bloomberg) -- Treasury Secretary Henry Paulson decided to take control of Fannie Mae and Freddie Mac after a review found the beleaguered mortgage-finance companies used accounting methods that inflated their capital, according to people with knowledge of the decision. Morgan Stanley, hired by the Treasury to probe the companies' finances, concluded the accounting, while legal, enabled Freddie, and to a lesser extent Fannie, to overstate the value of their reserves, according to the people who declined to be identified because the findings are confidential. â¦Fannie had $47 billion of capital as of June 30, according to company filings. The company is required by its regulator to hold $37.5 billion. Freddie's capital stood at $37.1 billion, compared with a requirement of $34.5 billion, filings show. Critics including former Federal Reserve Chairman Alan Greenspan and Richmond Federal Reserve Bank President Jeffrey Lacker have called for the companies to be nationalized. William Poole, the former head of the St. Louis Fed said in July that Freddie Mac is technically insolvent and Fannie Mae's fair value may be negative next quarter. Fed Involvement Fannie and Freddie dropped in after-hours trading on Sept. 5. Fannie fell $2.25, or 32 percent, to $4.79 at 5:50 p.m. in New York Stock Exchange trading and Freddie slumped $1.40, or 27 percent, to $3.70. The market value of Fannie's $21.7 billion in preferreds had dropped 64 percent to $7.87 billion late last month, according to Friedman Billings & Ramsey & Co. The market value of Freddie's $14.1 billion in preferreds has fallen 61 percent to $5.44 billion. Fannie's market capitalization is now $7.6 billion, down from $38.9 billion at the end of last year. Freddie's has fallen to $3.3 billion, from $22 billion over the same period. Bernanke participated in the meetings because the central bank was given a consultative role in overseeing Fannie's and Freddie's capital under legislation approved in July. Paulson's decision won the approval of Bernanke and Lockhart, the person briefed on the discussions said⦠Source: http://www.bloomberg.com/apps/news?pid=20601087&sid=aMX336c2lWGQ&refer=home .
I have to say, even though South America is not a place to "Brag" about, including the Bubble in Brazil... the high poverty rate and high birth rate among the poor in South America, You have a point on Dependence Day. This is the biggest bail out in the History of Free Markets. Common and prefered are to be "Liquidated". The plan is not out in full yet. The US STOCK MARKET is going to be the last place "SMART MONEY" will be returning to for a while. Bond Market, Commodities may be where they go. Global Markets possible as well. Fact of the matter is, the US STOCK MARKET will dry up. Of course not over night, give it a year or two as it will slowly bleed to death volume wise. However, get ready for some moves on Monday. Asian Markets tomorrow. This will be a hell of an interesting week. We still have plenty of room to fall before the market trends , S I D E W A Y s.