I swear I am laughing to cover the tears.

It's nice to "Get a piece of the Rock" tied around your neck.

Nostrovia,

I am not surprised. Insurance cos. are money flippers also, another great source of retirement money problems.

To the person who asked about confidence in the system.. I did not know that we had a system left.

Can undercapitalized day traders apply?

Not to quibble, but TARP has nothing to with this - 'insurance companies have been paying into the FDIC' Such noted TARP recipients as Goldman hadn't been paying into the FDIC either.

But it is all becoming a blur anyways - sort of like all the Wunderwaffen which were supposed to turn the tide of war for the losing side, it really doesn't matter much at this point.

At some point, it won't be possible to ignore that the U.S. is as bankrupt as GM as a going concern, regardless of whether the paperwork has been filed or not.

ac,

"Can undercapitalized day traders apply? "

Of course not. The TARP is for properly capitalized firms that are getting trashed because nervous nellies don't understand the inherent value of the assets on the books.

Nostrovia,

These bail outs are truly beginning to suck.

I mean, if I were to say, go out to the local dirt nap park, dig up a recently, but completely dead body, stuff it in a car, push it off a cliff and incinerate it, and collect my life insurance policy, they'd get real pissy about it.

I remember this one investigator that came to the door when I was adjusting my fake mustache...

Nostrovia,

Throw a few billion at life insurers so that the trillions you throw at banks goes unquestioned. Makes nice taking points on tee vee.

Like father, like son -
' Former U.S. Treasury Secretary and multimillionaire Henry Paulson spent much of his last year in office trying to save global capitalism.

His son, Merritt, spent much of the last year trying to bring Major League Soccer to Portland, Oregon. His job seemed much easier -- until last month.

Paulson is using $50 million of his father's fortune for the $129 million project. The problem is that Paulson wants the city to sell $65 million of bonds to turn the downtown home of his Portland Beavers minor league baseball team into a soccer stadium that meets major league requirements, and erect a brand new park for the Beavers. '
http://bloomberg.com/apps/news?pid=20601109&sid=aiY0Dfcik.8s&refer=home

Saving capitalism with government funds, that is.

Insurers have long been proud of "burying their own dead". That is, state guaranty funds are funded by pre- and post-loss assessments on insurers. Guess not so much anymore. Though I should mention that the property-casualty side is far different from the life side. Life insurers know when you will die and so their gamble is much more on the return they can get from invested assets. With P-C carriers, the main gamble is the underwriting profit, with gains on invested reserves the gravy.

Since paying back the TARP money is considered a good thing by the markets, will the insurers get whacked tomorrow?

The futures are down fairly solidly right now, though shy of a double digit S&P loss.

Aren't there scads of insurance companies that stretched for yield and have mountains of toxic waste on their balance sheets? After all, they were regulated by the crackerjack state regulators. I bet the insurance companies can use 500b to a trillion of offloading just on their own. I do believe the CNBC lunch crew owes Roubini and the IMF an apology, the writeoffs are going to be well north of $4 large....(trillions natch)

***CONJURE COMMUNIQUE***

If you've read the latest from Barry Eichengreen, as mp and I have, you know the global depression is now underway.

Have a nice day.

http://www.voxeu.org/index.php?q=node/3421

Here is the Eichengreen link mentioned above and worth a read. It's also appeared in some better newspapers.

Your in Good Hands with Tarp. It's like a Good Neighbor - - until they leave town at night.

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/04/07/financial/f1...
AP
Economist Nouriel Roubini lashes out at CNBC host

CNBC's Jim Cramer has another feud on his hands. Just weeks after "The Daily Show" host Jon Stewart took Cramer to task for trying to turn finance reporting into a "game," famous bear economist Nouriel Roubini criticized Cramer on Tuesday for predicting bull markets. In an interview, Roubini says Cramer has been wrong each time he's called for a bull market. Roubini is a New York University economics professor who predicted in 2006 that the worst recession in four decades was on its way. CNBC is a unit of General Electric Co.

WASHINGTON (AP) - The Treasury Department said Tuesday it has provided $5b billion to 10 Las Vegas casinos in the latest payments from the $700 billion financial rescue fund. The new investments mean the government has provided $33.5 billion for more than 5400 slot machines under a program which returns 50% of the take to regulatory officials and unspecified investors.

http://abcnews.go.com/Business/Economy/story?id=7283059&page=1
ABC News
Financial Crisis 'Far From Over,' Panel Says
Govt. May Spend More than $4 Trillion but Economy Faces 'Prolonged Weakness,' Oversight Panel Reports

Though some economic measures are improving, the financial crisis "is far from over" and "appears to be taking root in the larger economy."

"if they admit to a Ouija board"
--------

Bailout methodology revealed!
Exclusive to South Park!

http://www.youtube.com/watch?v=x0WaxMn3N8I&feature=related

"How can they possibly expect to cure the disease when all they do is run around treating the symptoms?"

They are the disease. Pretending to administer treatment is one of the symptoms.

We are so screwed....I really fear for the day when the "dopes" finally wake up and smell the coffee or pull their heads out of their over consumed fat asses. That will be a BAD day for the fat cats!

http://www.nytimes.com/2009/04/07/business/07sorkin.html?_r=1&ref=business
FDIC dirt that will cost you this time from the NYT:

No-Risk' Insurance at F.D.I.C.
(excerpt)
So where did the risk go this time?

To the F.D.I.C., and ultimately, to us taxpayers. A close reading of the F.D.I.C.'s statute suggests the agency is using a unique - some might call it plain wrong - reading of its own rule book to accomplish this high-wire act.

Somehow, in the name of solving the financial crisis, the F.D.I.C. has seemingly been given a blank check, with virtually no oversight by Congress.

"Nobody is paying any attention to how they're pulling this off," said a prominent securities lawyer who has done work for the government. Not surprisingly, he, along with others I asked to review the program, declined to be quoted by name. "They may not be breaking the letter of the law, but they're sure disregarding its spirit."

The F.D.I.C. is insuring the program, called the Public-Private Investment Program, by using a special provision in its charter that allows it to take extraordinary steps when an "emergency determination by secretary of the Treasury" is made to mitigate "systemic risk."

Simple enough, but that language seems to bump up against another, perhaps more important provision. That provision clearly limits its ability to borrow, guarantee or take on obligations of more than $30 billion. The exact legalistic language says that it "may not issue or incur any obligation" over that limit. (You can read a highlighted version of the F.D.I.C.'s charter at nytimes.com/dealbook.)

***CONJURE COMMUNIQUE***

If you've read the latest from Barry Eichengreen, as mp and I have, you know the global depression is now underway.

Have a nice day.

O,
bought and paid for by the bankers. Two words: Tim, Geithner.

Random OT trivia:
How big of a rent seeker is Suez Canal?
Last year's revenue was $4.5 billion.
http://online.wsj.com/article/SB123913890018398337.html

"That is why gold is so insidious. It leaches money from the big Ponzi at the Fed."

Am I missing something here: if you pull cash out and create a contraction in the banking system, then when you purchase gold your money goes back into a bank (when the gold seller deposits it) and cancels out the contraction, right?

If that is true, then I think the real answer might be barter. When no money changes hands, no money ever gets into a bank.

I think you are correct homedad.

Something I've been thinking about is the money printing, inflation and deflation. Kevin Depew at Minyanville.com has been banging the drum about deflation and he is right on with common sense. (especially yesterdays article about beheading bankers) I'm no Krugman, but if a handful of people (100-1000) print trillions of dollars, doubling the national debt in 12 months, those people hoard the money and make a new superwealthy class, say the Paulson class. They will use loopholes in the tax law to not pay taxes on the money (like Paulson). These poeple will not be able to buy enough things to create inflation. HOWEVER, the number of dollars would have been devalued by 50%. As the super wealthy spend and leave the money to future Paris Hiltons, those who are not super wealthy will be fighting to obtain what is left in the money supply for all nonsuper wealthy.

"Why did I submit paperwork to cash my 401k out over two weeks ago and my money is still tied up?

Just because I took out 2 loans against the "collateral" over the past 3 years, and defaulted on both "loans"

I am expecting the last of the "fair value"

get yer shit together fucktards....... the people who did this are the ones crushing the life out of me.

Eichengreen is the new Roubini.

Debt as a drug. Sure.
Who is doing the intervention and who is the sponsor when the jones gets bad?
What will the banks push instead? Savings bonds?

Side note. There are an estimated 280 million personal firearms in America. The rise of murder using firearms isn't a new development.

So if the USG is giving money to life insurers why should the Pentagon cut the F-22? Defense spending would actually get more cash into consumer hands than money to zombie banks, and the Air Force would get airplanes out of the deal.

Probable repost http://www.reuters.com/article/gc03/idUSTRE5363EV20090407http://www.reut... increased late mortgages

The you tube video show the men with guns making the children and old women dig for the gold. Isn't that how it has always worked?

I don't see a real conspiracy, just a handful of "haves" using their power, influence and connections to write rules that will benefit them and their children. Those rules will punish the rest of us.

I've been in Homedad's vomit filled shoes. It's gonna be a long night. Good Luck!

"However, with barter you have to have tangible resources or skills to trade..."

Here's an idea:

If you drive a diesel, set up a biodiesel plant in your garage. Trade your excess fuel.

sneering nihilist, I'll bite on that challenge.

Every $1 of debt is also (to someone else) $1 of savings. All savings is just (ultimately) a promise from someone else to give you things of value in the future, in return for you giving them something of value today. The simplest and most common form of this barter through time is simple lending to someone else. Every $1 of bad (unrecovered) debt is $1 of lost savings.

Most of the public (and us) are familiar with the debt part, but we aren't all so familiar with the savings. When we save by lending, we don't typically do it by making direct loans to our colleagues and neighbors. We have day jobs, so we give the money to an institution that makes the loans on our behalf. Yes, yes, we don't all agree with all the decisions those institutions make, but the institutions - banks and insurance companies mainly - are lending almost entirely for us, in the sense that over 90% of the money they lend comes from customers, not the owners of the institutions, and over 90% of the payments they receive goes back to customers. They are mainly intermediaries, not principals. Almost all the news coverage is on the 10%, but that's more of that "never mind the man behind the curtain" (like politics) that can fool anyone unless we take the time to educate ourselves.

The "less than 10%" part is provided by the owners of the institutions - shareholders. It's not a lot, but it's enough to pay for hiring people, buying equipment, and renting buildings etc to run the lending operation, and a little left over to absorb a few bad loans from time to time. Again, we are talking mostly about banks and insurance companies. These are the biggest institutions that mediate lending between savers and borrowers.

This "less than 10%" model works reasonably well until an unusually bad recession causes more than 10% of the loans to go bad all at once across most institutions. Then either savers (bank depositors, or policyowners in the case of the insurance companies) take a haircut or - the choice our government prefers - (a) taxpayers take the haircut for them, or net savers take the haircut, through uncompensated inflation.

The whole thing stinks, because it moves responsibility from the people taking the actions to innocent bystanders, but it's our system. We do it this way because it makes it people feel more confident saving and investing. Our politicians tend to think we should do more of that than we do as free individuals, so they want to make it feel low-risk. (The risk is not reduced, it's just dumped on someone else.) If we have a system like this that encourages more saving and lending, then encouraging long-term investing should be ranked higher than short-term. Insurance companies lend (on average) longer than banks, so if they get in trouble, it seems they would 'deserve' bailouts even more than the banks.

Hope that helps. Experts in economics and finance, please excuse my repeating things you already know.

"On the tape and in his interview with Salon, McNinch seemed to admit what countless soldiers not just at Fort Carson but across the Army have long suspected: At least in some cases, the Army tries to avoid diagnoses of PTSD. But McNinch did not directly address why the Army discourages these diagnoses, in either the interview with Salon or the tape-recorded encounter with Sgt. X.

The answer probably has to do with money. David Rudd, the chairman of Texas Tech's department of psychology and a former Army psychologist, explained that every dollar the Army spends on a soldier's benefits is a dollar lost for bullets, bombs or the soldier's incoming replacement. "Each diagnosis is an acknowledgment that psychiatric casualties are a huge price tag of this war," said Rudd. "It is easiest to dismiss these casualties because you can't see the wounds. If they change the diagnosis they can dismiss you at a substantially decreased rate.""

http://www.salon.com/news/special/coming_home/2009/04/08/tape/

In case you want an example of a what could be a better use of the bailout funds.

That said, we do need across the board cuts in our budget. The military included.

"The F-22 is being closed out because the current administration doesn't like the military. It is that simple."

Gates: What about the the F-22?

Obama Admin: Will it piss them off if we cancel it? And by them I mean the military industrial complex.

Gates: Undoubtedly.

Obama Admin: Then do it but can you call just the Generals and tell them it is because we don't like them. Don't piss off the industrial side of the complex. Those guys have PACs and lobbyists.

Gates: Uhhh I can try but...

Obama Admin: Ok. How about Health Care can you change anything there?

Gates: Not my department!

Obama Admin: Ok. Dismissed.

"THESE ARE NOT THE SAME LEVERAGE!!!"

No, they're not the same, but their effect on the economy became the same when the government stepped in.

"No, they're not the same, but their effect on the economy became the same when the government stepped in."

Man, is de-leveraging gonna hurt!

This is Captain Obvious saying, "Goodnight."

Anyone ever hear of captive insurance scams? Found this very interesting article at IPS:
"AIG did that a lot," a former insurance regulator said, speaking under condition of anonymity. "AIG helped companies set up offshore captive reinsurance companies. AIG would then overcharge on insurance and pay reinsurance premiums to the captives, giving the captive owners tax-free offshore income."

AIG declares on its website, "We pioneered the formation of captives almost 60 years ago," and it offers management facilities to run the captives in offshore Barbados, Bermuda, Cayman Islands, Gibraltar, Guernsey, Isle of Man, and Luxembourg - where corporate and accounting records are secret and taxes minimal ....David Schiff, editor of Schiff's Insurance Observer, told IPS: "There are more captive insurance companies in Bermuda than any place else. The whole purpose is that it's not regulated by the U.S."

Of course, fraudulent use of offshore captives is hardly likely to be disclosed by taxpayers or noted on tax returns. Spokesmen at Treasury and the IRS declined to discuss the issue.

It would be unthinkable for the U.S. to allow a business it has on life support to evade taxes or help others to evade them.

The multi-billion dollar bailout of AIG by the U.S. could trigger extensive examinations by accountants to make detailed analyses of the company's offshore strategies.....

I should have included pension funds to the banks and insurance companies. These are the big intermediaries between savers and borrowers in a modern western economy

"It would be unthinkable for the U.S. to allow a business it has on life support to evade taxes or help others to evade them.

The multi-billion dollar bailout of AIG by the U.S. could trigger extensive examinations by accountants to make detailed analyses of the company's offshore strategies..... "

Pfffff...Countries don't think people do. And the people who hold the reigns of power here, think that the profits available from these schemes are VERY neat, and have there hands deep into that cookie jar.

But if you're a small fish that got in on that action, without proper connections, be prepared to be made an example of. The people in this country get their blood lust saked quite easily.

Nostrovia,

Am I missing something here: if you pull cash out and create a contraction in the banking system, then when you purchase gold your money goes back into a bank (when the gold seller deposits it) and cancels out the contraction, right?
It is not this step but the next step that scares the central bankers - People start using gold as a store of value thus repudiating the fiat currency.

Invest in learning how to farm, invest in materials that will help you learn (soldering iron, PCB, learning how to prototype circuit boards, etc.).... invest the money in yourself and your family... learn a foreign language or two... hire good baby sitters and spend more time with your spouse... learn how to play a musical instrument... learn how to make professional style podcasts from your computer using FOSS software... read books from the library... and most importantly of all, learn how to use and aim a firearm.

Also, you can learn how to stash cash in places where no one will find it, until 80 years later when someone comes along and says... EUREKA! Most likely for every story you hear of someone finding old cash there are 20 grandparents who actually did remember to collect their stash of cash before moving on...

Investigative journalist Lucy Komisar at thekomisarscoop.com has a detailed report of AIG's shenanigans.

....Would Greenberg have known that his company was writing such a tax-evading policy for the likes of Victor Posner, a notorious crook who was banned from public companies by the Securities and Exchange Commission (SEC) in 1988? Very likely.

The scam was discovered by Terry Mills who worked for a large insurance company in Delaware and was tasked to investigate the insurance of Posner's NVF Corporation in 1993. Mills found that the premiums were double the going rate. He said, "We were able to find them coverage in the standard market."

However, the Delaware Insurance Department did not make the scam public or take any action against AIG, which was so powerful that it intimidated government regulators.
...In 2002, the IRS and the Treasury required transactions with captives to trigger disclosure, list-maintenance, and registration requirements "based on information that many of these arrangements were being used to shift income improperly to PORCs (Producer-Owned Reinsurance Companies) for purposes of avoiding income tax."
....However, in September 2004, the George W. Bush administration abolished that rule. "

"Are you a more effective President if you are better at selling deception than the other guy, and have a more naive & gullible support base to dupe ?"

The Democratic/liberal leaning among us have had 8 years of sniffing out deception and lies. The bloggers and commentariat are already calling BS all over the new administration.

A woman scorned is deadly and the line between love and hate is very tenuous. The same could be said of the Obama supporters. I am one of them. I am pissed.

Everyone had their chance to vote for Ron Paul, or someone not of the major party.

According to Wikipedia (probably sourced elsewhere): there were ~ 130 million votes for R's or D's and it appears no more than 2 million votes for everyone else combined.

Thanks for the comments.

Fractional reserve banking involves banks keeping enough real money on hand to cover a certain fraction of their deposit liabilities - a fraction high enough so that they can cover the withdrawals people typically make. The basic rule that Assets (Loans and operating assets) = Liabs (money from depositors) + Equity (money from shareholders) still applies. Making a new loan of $1000 doesn't just create $1000 more shareholder equity.

"i'm trying to resolve the role of the pension funds in this crisis."

The pension plans are just waking up to the fact they were the sucker at the poker table. Or the virgin at prom. Or the sheep to the wolves. Whatever. You get the point.

Pension plan money should be used to set up credit unions in the communities where they live and work. Watch over the money locally and I guarantee it won't disappear. If it does you know exactly who is to blame and where they live.