Remember when double and even triple inverse leveraged ETFs were all the rage? That all occurred in the brief period of time before it became clear that Bernanke would first take down the global financial system before he let Citi get back to $1/share again. Apparently one reader recalls it all too well: "In 2008 at the bottom of the market I sold positions I owned in physical
gold and banks stocks such as Bank of America (BAC), Citigroup (C) and
also non financial companies such as Ford (F). I used these proceeds to
purchased inverse ETF’s such as NYSE: FAZ (Direxion Financial 3x Short)
and NYSE:SRS (Proshares Real Estate 2x Short). Since making these purchases, these ETF’s have suffered significant
drops in value as reflected in their price. In fact NYSE: FAZ has
plummeted from $1100 per share to $11 per share and SRS has reduced in
price from $1000 per share to $19.50 per share. It is now apparent that
the Fed spent trillions of dollars to raise the price of bank stocks and
to inversely suppress the price of these inverse ETFs." Yet is this nothing but a case of fippers' remorse? Is there legal precedent for an actual claim? Was the Fed in breach of duty "by allowing investors to make investments into funds such as FAZ and SRS
and other inverse ETF’s, while the Fed was performing transactions that
the Fed knew or should have known would severely harm the investors in
these publicly traded fund." Will Bernanke cave and make whole everyone who dared to put money into the market, even if it meant betting on a broad market decline? After all the whole purposes of the latest propaganda campaign is to get people to put money in the market with no fear of loss whatsoever: whether one is bullish or bearish (and as the lack of participation shows, most are certainly still bearish). Which is where it gets interesting: "Therefore, I appeal to your office
to make due and just compensation in treble damages amounting to $__
million dollars for a full and good faith settlement of this matter. If
this is agreeable, I am prepared to enter into a confidential good faith
settlement." In our ridiculous bizarro world, in which nothing makes sense following each recurring Fed intervention, perhaps the Fed making whole those who lose money regardless of their bias, is just what is needed to break the 33 weeks of outflows...
Full letter submitted by Bill Pitts:
December 7, 2010
Mr. Ben Bernanke
Chairman
Federal Reserve Bank
20th Street and Constitution Avenue NW
Washington, DC 20551-0001
Re: Financial Loss Suffered By Owners of Inverse ETF’s
Dear Chairman Bernanke:
On or about March of 2009, the Federal Reserve Bank (The “Fed”) commenced in actions that involved making loans to banks, financial institutions, wholly owned Fed companies (i.e. Maiden Lane), lenders and publicly traded companies. Additionally evidence suggest that the Fed through these firms and at the direction of the Fed made direct purchases of equities in publicly traded companies for the purpose of raising stock prices. These transactions were undisclosed to the public and investors. Neither the Fed nor the recipient companies disclosed these material transactions to the investing public. Ostensibly, this assistance from the Fed was conducted with the objective of increasing the stock value of many troubled companies and banks. Additionally, under the plan by the Fed and U.S. Treasury, these banks and financial institutions used the Fed supplied funds to purchase each other’s stock. This was conducted to allow each bank to raise each other’s stock values to improve the assets values on one another’s balance sheets. These actions were supported encouraged, known about and assisted through actions of the Fed and the United States Treasury.
While these actions may have been helpful to those firms to abate the systemic problems within the market, assisted in working to make recipient banks more solvent and may have prevented additional bank failure, these actions resulted in severe detrimental damage to many individual investors.
As you are keenly aware, most every market transaction has two sides to a trade. As a stock or asset class increases in value, some investors realize gain while simultaneously others who concluded that the stocks would NOT improve in price and made investments accordingly known as taking a “short” position would loose money. The inverse of this scenario is also true.
As stock prices decrease, those investors who purchased inverse Exchange Traded Funds (“ETF’s’) would gain value in their investments.
As I understand it, between the Fed and the SEC you all are charged with ensuring fairness, honesty and integrity in our markets and monetary system. It is also my understanding that the Fed professes to never intervene in the markets unless it is to prevent crisis.
I attempted to understand current events, market conditions and the fundamentals of financial and cash flow statements prior to making personal direct investments. I have always assumed that significant transactions with companies being publicly traded would be conducted in the open and that significant transactions would be disclosed to all investors to make informed decisions. Unfortunately, it appears that as a result of the Feds efforts to correct the current financial crisis these rules of disclosure and openness were set aside.
After the September 2008 market crash I took a much more active role in managing my investments. Based upon reading financial data and analyst reports it was very obvious to me that there many commercial property REITS, banks and lending institutions were severely impaired, would suffer significant cash shortfalls and were insolvent or would go bankrupt. It appears that your office arrived at the same conclusion as evidenced by the subsequent injection of hundreds of billions of dollars of cash directed to these institutions by the Fed.
In 2008 at the bottom of the market I sold positions I owned in physical gold and banks stocks such as Bank of America (BAC), Citigroup (C) and also non financial companies such as Ford (F). I used these proceeds to purchased inverse ETF’s such as NYSE: FAZ (Direxion Financial 3x Short) and NYSE:SRS (Proshares Real Estate 2x Short).
Since making these purchases, these ETF’s have suffered significant drops in value as reflected in their price. In fact NYSE: FAZ has plummeted from $1100 per share to $11 per share and SRS has reduced in price from $1000 per share to $19.50 per share. It is now apparent that the Fed spent trillions of dollars to raise the price of bank stocks and to inversely suppress the price of these inverse ETFs.
Now 20 months after these investments were originally made, your office disclosed that it had directly and indirectly injected hundreds of billions of dollars into numerous publicly traded companies. However, this information was not made public to investors by either the Fed or the institutions receiving these cash injections as these significant material transactions were occurring.
As a result, investors could not make informed investment decisions. By allowing investors to make investments into funds such as FAZ and SRS and other inverse ETF’s, while the Fed was performing transactions that the Fed knew or should have known would severely harm the investors in these publicly traded fund.
My damages had I continued to hold onto my shares of Ford and physical gold are in excess of $__ million. Therefore, I appeal to your office to make due and just compensation in treble damages amounting to $__ million dollars for a full and good faith settlement of this matter. If this is agreeable, I am prepared to enter into a confidential good faith settlement. I would also be prepared to drop action in attempting to raise public awareness to prepare for a class action lawsuit against the Fed regarding this matter.
Should we not be able to resolve this matter I will be forced to file a claim in the Federal District Court and work to initiate a Class Action Lawsuits to represent all owners of these inverse ETF’s that suffered economic loss. Enclosed please find a few of the reports relied upon to arrive at the conclusions. I would seek to further explore this through depositions and discovery of the many recipients of funds from the Fed.
I do not envy your position and the challenges you face during these very difficult times. Had I been on the other side of these trades I may very well hold a higher opinion of the Fed and its actions. Unfortunately I have been damaged as a result of your decisions.
Should your office desire to discuss this, I can be reached at my office at XXX-XXX-XXXX or my mobile at XXX-XXX-XXXX
Regards,
William G. Pitts
Enclosures
Totally Busted: The Truth About Goldman's Bailout by the Fed
"Secret bailouts do not merely benefit recipients; they also deceive investors into mistaking fantasy for fact. Such deceptions often punish honest investors, like the honest investors who sold short the shares of insolvent financial institutions early in 2009.Based on all available public disclosures, the story remained fairly grim into the spring of 2009. Accordingly, the short interest – i.e., number of shares sold short – on Goldman Sachs common stock hit a record 16.3 million shares on May... 15, 2009 – about 3.3% of the public float. But over the ensuing six months, Goldman’s stock soared more than 30% – producing roughly $500 million in losses for those investors who had sold short its stock. Not surprisingly, the total short interest during that timeframe plummeted to less than 6 million shares, as short-sellers closed out their losing positions."
http://www.economicpolicyjournal.com/2010/12/totally-busted-truth-about-goldmans.html
12/1/10 Fed aid in financial crisis went beyond U.S. banks to industry, foreign firms
http://www.washingtonpost.com/wp-dyn/content/article/2010/12/01/AR2010120106870.html
12/1/10 Fed gave $3.3 Trillion to banks
http://www.youtube.com/watch?v=rTPa1hGtpJs
12/1/10 Fed made $9 trillion in emergency overnight loans
http://money.cnn.com/2010/12/01/news/economy/fed_reserve_data_release/index.htm?hpt=T1
12/1/10 Meet The 35 Foreign Banks That Got Bailed Out By The Fed (And This Is Just The CPFF Banks)
http://www.zerohedge.com/article/meet-35-foreign-banks-got-bailed-out-fed-and-just-cpff-banks
12/2/10 Federal Reserve May Be `Central Bank of the World' After UBS, Barclays Aid
http://www.bloomberg.com/news/2010-12-02/federal-reserve-may-be-central-bank-of-the-world-after-ubs-barclays-aid.html
Fed Releases Details on Bear Stearns, AIG Portfolios
http://www.bloomberg.com/apps/news?pid=20601087&sid=aymTlczlMmpA&pos=1
Fed in hot water over secret bailouts
http://www.csmonitor.com/Money/Robert-Reich-s-Blog/2010/0401/Fed-in-hot-water-over-secret-bailouts
The Fed Admits To Breaking The Law
http://networkedblogs.com/21Xqv
Fed Opens Books, Revealing European Megabanks Were Biggest Beneficiaries
http://www.huffingtonpost.com/2010/12/01/fed-opens-books-revealing_n_790529.html
Paulson/Goldman/Center for Responsible Lending
http://www.youtube.com/watch?v=E10bHAI7U68&feature=player_embedded
Goldman CEO Visited WH 4 Times During SEC Investigation
http://www.thefoxnation.com/business/2010/04/22/goldman-ceo-visited-wh-4-times-during-sec-investigation
Goldman's White House connections raise eyebrows
http://www.mcclatchydc.com/2010/04/21/92637/goldmans-connections-to-white.html
Indymac Boys Get Sweetheart Deal
http://www.youtube.com/watch?v=ssl5yb7FewA
Obama’s $6.3 Trillion Scam Is America’s Shame:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a.G6KFfaDdSc
Congress threatened with Martial Law if they do not give hundreds of billions to Bankers
http://www.youtube.com/watch?v=HaG9d_4zij8
Alan Grayson: "Which Foreigners Got the Fed's $500,000,000,000?" Bernanke: "I Don't Know."
http://www.youtube.com/watch?v=n0NYBTkE1yQ&feature=player_embedded
BoE Secretly Loaned $102.9 Billion to RBS
http://www.cnbc.com/id/34126826
Bank of England tells of secret £62bn loan to save RBS and HBOS
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6646923/Bank-of-England-tells-of-secret-62bn-loan-to-save-RBS-and-HBOS.html
Bank of England advisers not told about secret £62bn loan to HBOS
http://www.guardian.co.uk/business/2009/dec/03/bank-england-secret-loan-hbos
Federal Reserve refuses to tell the US Senate to Whom they have given $2.2 Trillion
http://www.youtube.com/watch?v=2EQDrVKYWmc
Bailouts could cost U.S. $23 trillion
http://www.politico.com/news/stories/0709/25164.html
Sticker Shock: $23.7 Trillion Bailout?
http://abcnews.go.com/Business/Politics/story?id=814
Tracking the $19 Trillion Bailout Funds
http://blog.newsweek.com/blogs/wealthofnations/archive/2009/09/22/tracking-the-19-trillion-bailout-funds.aspx
Fed Lends Two Trillion Without Oversight
http://www.youtube.com/watch?v=oxuqmPyKqcs&feature=player_embedded
How Lehman, With The Fed's Complicity, Created Another Illegal Precedent In Abusing The Primary Dealer Credit Facility
http://www.zerohedge.com/article/how-lehman-feds-complicity-created-another-illegal-precedent-abusing-primary-dealer-credit-f
Access to fed Money - One of few naked Short Sellers who destroyed Bear Stearns and Lehamn Bothers
http://www.youtube.com/watch?v=Q48eSoTNByQ&feature=related
Geithner: Pickpocketing Trillions from the People to Give to the Oligarchy Was "Deeply Unfair", But We ... Um ... WE Had To
http://www.washingtonsblog.com/2010/04/geithner-looting-country-for-trillions.html
Why Is The Fed Actively Managing A $25 Billion Maiden Lane MBS Portfolio When Its $2.4 Trillion SOMA Holdings Have A $1 Billion DV01? (And Are Unhedged)
http://www.zerohedge.com/article/why-fed-actively-managing-25-billion-maiden-lane-mbs-portfolio-when-its-24-trillion-soma-hol
Did The Fed Just (Surreptitiously) Bail Out Europe?
http://www.themarketguardian.com/2010/04/did-the-fed-just-surreptitiously-bail-out-europe/
Goldman Sachs pay out $111million in bonuses despite taking billions in bailout money
http://www.dailymail.co.uk/news/article-1339220/Goldman-Sachs-pay-111million-bonuses-despite-taking-billions-bailout-money.html#ixzz18NTzHyqF
Goldman's White House connections raise eyebrows
http://www.mcclatchydc.com/2010/04/21/92637/goldmans-connections-to-white.html
Israeli made partner at Goldman Sachs
http://www.ynetnews.com/articles/0,7340,L-3320118,00.html
Goldman Sachs was top Obama donor
http://articles.cnn.com/2010-04-20/politics/obama.goldman.donations_1_obama-campaign-presidential-campaign-federal-election-commission-figures?_s=PM%3APOLITICS
Israel OKs US ‘Gift’ of Billions of Dollars in Warplanes
http://news.antiwar.com/2010/09/16/following-fierce-debate-israel-decides-to-buy-f-35-warplanes/
h/t Will
Two years into the Obama presidency and the economic data is still looking grim. Don't be fooled by the gyrations of the stock market, where optimism is mostly a reflection of the ability of financial corporations -- thanks to massive government largesse -- to survive the mess they created. The basics are dismal: unemployment is unacceptably high, the December consumer confidence index is down, and housing prices have fallen for four months in a row. The number of Americans living in poverty has never been higher, and a majority in a Washington Post poll said they were worried about making their next mortgage or rent payment.
In a parallel universe lives Peter Orszag, President Barack Obama's former budget director and key adviser, who even faster than his mentor, Robert Rubin, has passed through that revolving platinum door linking the White House with Wall Street. The goal is to use your government position to advance the interests of your future employer, and Orszag and Rubin's actions in the government and then at Citigroup provide stunning examples of the synergy between big government and high finance.
As Bill Clinton's treasury secretary, Rubin presided over the dismantling of Glass-Steagall, the New Deal legislation that would have prohibited the creation of the too-big-to-fail Citigroup. He was rewarded with a $15-million-a-year job at Citigroup, where he became a leader in the bank's aggressive move into high-risk ventures. An SEC report in September claimed that Rubin as Citigroup chairman was aware that the bank failed to disclose $40 billion it held in subprime mortgages before the collapse.
During those years at Citigroup, Rubin financed the Brookings Institution's Hamilton Project, an economic policy program, and named Orszag, a Clinton economic adviser, as its director. The Hamilton Project continued to celebrate Rubin's deregulation philosophy up to the point of utter embarrassment. Clearly, Orszag is not easily embarrassed, for upon taking his new job recently he boasted "I am pleased to be joining Citi, with its unmatched global platform and dedication to providing clients with service and advice."
The most damning comment on this corrupt syndrome was offered by former Citigroup co-chief executive John Reed, who had worked with Rubin to get Glass-Steagall reversed and now is a sharp critic of the result. "We continue to listen to the same people whose errors in judgment were central to the problem," Reed told Bloomberg News. "I'm astounded because we basically dropped the world's biggest economy because of an error in bank management." Reed estimated that the financial deregulation proposals contained in the Dodd-Frank bill and other reforms of the Obama administration represent only 25 percent of the change needed.
The failure to provide serious regulation of the financial industry to avoid future downturns is documented in devastating detail in that Dec. 28 Bloomberg report, written by Christine Harper:
"The U.S. government, promising to make the system safer, buckled under many of the financial industry's protests. Lawmakers spurned changes that would wall off deposit-taking banks from riskier trading. They declined to limit the size of lenders or ban any form of derivatives."
The reason for that failure is obvious from the president's choice of advisers featuring Rubin acolytes from the Clinton years. Harper writes: "While Obama vowed to change the system, he filled his economic team with people who helped create it," referring to, among others, Timothy F. Geithner, who had gone from the Clinton Treasury Department to head the New York Fed, where he presided over the salvaging of Citigroup and AIG. As Obama's treasury secretary he was quick to appoint a Goldman Sachs lobbyist as his chief of staff. Geithner's subservience to Wall Street was reinforced by White House top economic adviser Lawrence Summers, Rubin's deputy and then replacement in the Clinton administration who pushed through the repeal of Glass Steagall and fought against the regulation of derivatives.
And with the decisive assistance from both a Republican and Democratic president, all has worked out just as planned for the banks. Harper reports: "The last two years have been the best ever for combined investment-banking and trading revenue at Bank of America Corp., JPMorgan Chase & Co., Citigroup, Goldman Sachs Group Inc., and Morgan Stanley, according to data compiled by Bloomberg."
It's all wonderfully bipartisan. Recently it was announced that Carlos Gutierrez, commerce secretary under George W. Bush, had been named to a high position at Citigroup. For President Obama, there's no cause for worry about the loss of indispensable talent from his administration. Orszag's replacement as head of the Office of Management and Budget, Jacob J. Lew, was both a member of Rubin's Hamilton Project and a former Citigroup executive -- thus insuring that government of the banks, by the banks, for the banks shall not perish from the earth.
surface encounters complaints surface encounters rock tops surface encounters rock tops surface encounters rock tops surface encounters complaints surface encounters review surface encounters review surface encounters review surface encounters review surface encounters review surface encounters rock tops surface encounters surface encounters complaints surface encounters rock tops surface encounters surface encounters review surface encounters rock tops surface encounters surface encounters surface encounters The newly reported drop in jobless claims belies continued rough going for America's Iraq and Afghanistan war veterans, who are experiencing 10 percent unemployment.
What does a one-legged man, a fly-sized frog, a bacon sculpture of Kevin Bacon, conjoined twins who can see out of each other's eyes and a 115-foot Jesus statue have in common? They've all made the list for AOL's Top Ten Weird News ...
"I love all my gay fans and this immature act is not targeted at you," he says.
surface encounters rock tops surface encounters surface encounters surface encounters review surface encounters complaints surface encounters surface encounters complaints surface encounters review surface encounters surface encounters surface encounters review surface encounters surface encounters complaints surface encounters surface encounters complaints surface encounters review surface encounters review
