Liberty Planet Weblog

Archive for February 2010

An alleged hacker has been hailed as a latter-day Robin Hood for leaking data about the finances of banks and state-owned firms to Latvian TV.
Using the alias “Neo” – a reference to The Matrix films – the hacker claims he wants to expose those cashing in on the recession in Latvia.
He is slowly passing details of leading Latvian firms via Twitter to the TV station and has its audiences hooked.
The Latvian government and police are investigating the security breach.
Data leaked so far includes pay details of managers from a Latvian bank that received a bail-out.
It reveals that many did not take the salary cuts they promised.
Other data shows that state-owned companies secretly awarded bonuses while publicly asking the government for help.

Read the full article at: http://news.bbc.co.uk/2/hi/technology/8533641.stm?source=patrick.net

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A front-page story in the state’s China Information News said the record $34bn sale of US bonds in December was a “commendable” move. The article was republished by the National Bureau of Statistics, giving it a stronger imprimatur.
It follows a piece last week in China Daily, the Politburo’s voice, citing an official from the Chinese Academy of Sciences praising the move to “slash” holdings of US debt. This was published on the same day that US President Barack Obama received the Dalai Lama at the White House, defying protests from Beijing.

Read the complete article at: http://www.telegraph.co.uk/finance/currency/7300770/Concerns-grow-over-Chinas-sale-of-US-bonds.html?source=patrick.net

From Dow Jones:

The U.S. banking industry continued to struggle in the fourth quarter, as the number of banks on the brink of failure continued
to rise and the government’s fund to protect deposits fell sharply into the red.

FDIC Report

The Federal Deposit Insurance Corp. said Tuesday that its deposit-insurance fund fell to $20.9 billion at the end of 2009, a $12.6 billion drop in the final three months of the year, as bank failures continued at a pace not seen since the savings and loan crisis. The fund’s reserve ratio was -0.39% at the end of the quarter, the lowest on record for the combined bank and thrift fund.

Continue reading: http://www.zerohedge.com/article/fdic-hits-record-default-levels-deposit-insurance-fund-plunges-127-billion-negative-209-bill?utm_source=patrick.net

A new advisory being sent by America’s third largest bank to its account holders has stoked fears that major financial institutions could be preparing for old fashioned bank runs if the economy takes a turn for the worse.
Originally reported by John Carney over at the Business Insider website, Citigroup is sending the following information to customers along with their bank statements.
“Effective April 1, 2010, we reserve the right to require (7) days advance notice before permitting a withdrawal from all checking accounts. While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change.”

Continue reading at: http://www.prisonplanet.com/citigroup-warns-customers-it-may-refuse-to-allow-withdrawals.html?source=patrick.net

By the way, they have been data basing your child’s DNA for years!

An article Monday by the Texas Tribune, a news Web site, said the state health department sent 800 anonymous samples to the military to help create a national mitochondrial DNA database. The samples were sent in 2003 and 2007, according to the department’s Web site.

Read the article at: http://www.statesman.com/news/texas-politics/suit-possible-over-baby-dna-sent-to-military-268714.html

Heidi is the proprietor of a bar in Detroit . She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem, she comes up with new marketing plan that allows her customers to drink now, but pay later.

She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).

Word gets around about Heidi’s “drink now, pay later” marketing strategy and, as a result, increasing numbers of customers flood into Heidi’s bar. Soon she has the largest sales volume for any bar in Detroit .

By providing her customers’ freedom from immediate payment demands, Heidi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages. Consequently, Heidi’s gross sales volume increases massively.

A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Heidi’s borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.

At the bank’s corporate headquarters, expert traders transform these customer loans into DRINKBONDS, ALKIBONDS and PUKEBONDS. These securities are then bundled and traded on international security markets. Naive investors don’t really understand that the securities being sold to them as AAA secured bonds are really the debts of unemployed alcoholics.

Nevertheless, the bond prices continuously climb, and the securities soon become the hottest-selling items for some of the nation’s leading brokerage houses.

One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi’s bar. He so informs Heidi.

Heidi then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts. Since, Heidi cannot fulfill her loan obligations she is forced into bankruptcy. The bar closes and the eleven employees lose their jobs.

Overnight, DRINKBONDS, ALKIBONDS and PUKEBONDS drop in price by 90%. The collapsed bond asset value destroys the banks liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.

The suppliers of Heidi’s bar had granted her generous payment extensions and had invested their firms’ pension funds in the various BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds. Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.

Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multi-billion dollar no-strings attached cash infusion from the Government. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers.

Now, do you understand

Source: http://www.hydle.com/blog/archives/338/comment-page-1?source=patrick.net


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