http://www.zerohedge.com/news/2013-04-12/fear-uncorrelated-stock-market

( US stocks = paper tulips , non electronic bitcoins ? )

Fear The Uncorrelated Stock Market

Submitted by Tyler Durden on 04/12/2013 19:08 -0400

Asset price correlations across a wide spectrum of industries and asset classes are meaningfully lower than the last few months. ConvergEx's Nick Colas note that this is something completely unexpected: we’ve approached a “Normal” capital market over the last 30 days.

S&P 500 sector correlations are below 80% relative to the index, foreign stocks are 77-87% correlated to U.S. stocks, and even domestic high yield corporate bonds are 56% dancing to their own tune.

However, before we run off celebrating the return to a stock-picker’s market, it is worth noting one statistical point worth your time:when industry sector correlations have dropped below 80% from 2010 to the present...

the subsequent one month, one quarter and one year returns have been below average, especially the shorter time frames.

Via Nick Colas, ConvergEx,

“Early is the same thing as wrong.” That’s another oldie-but-a-goodie from my library of ancient trader sayings, and I can’t help but think about it every time I see another high profile finance professional call a top to the U.S. equity market. The next day usually proves them wrong, and the next week confirms it, and the next month slams the last nail in the coffin of the prediction. You’d think that everyone would remember the mother of all bad “Get me out” calls – the Alan Greenspan “irrational exuberance” meme. He called the top of the domestic market in December 1996. About 1,000 days early.

At the same time, one understands the desire to make the call in the current environment. Stocks have more than doubled off the bottom, many investors have made a year’s worth of returns in the last three months, and despite lackluster U.S. economic data and troublesome rumblings from Europe, U.S. stocks basically just go up. As the poet Browning said, “God’s in his heaven – All’s right with the world.”

Perhaps the biggest surprise of all, although not as enticing as the “New high every other day” pattern, is that asset price correlations have declined to some of their lowest levels in years. Simply put, that means that capital markets are actually differentiating between health care stocks and emerging market equities. You’d think they would always do that, but since the Financial Crisis this has been a distinctly rare event. The whole “Risk on, risk off” theme has been a popular explanation of market behavior for a good reason – it has been largely true that all risk assets rise or fall together.

Until this month, anyway. Every 30 days or so we look at the asset price correlations for a range of industry sectors and different asset classes. We’ve been doing this for several years now, and the idea is to assess the health of the market in a more robust way that just saying “Stocks are up; everything is OK.” For a capital market to function properly, different investments have to move at different times. This allows for the benefits of diversification to offset the systematic risk of owning any one stock, bond, currency, commodity, or anything else. For this month, as shown in the accompanying tables and charts, the correlation news looks remarkably good. Here are our key points:

The average correlation among the 10 different industry groups in the S&P 500 were 79% last month. That might sound high – common wisdom is that half of an asset’s move is typically due to the broader market – but compared to the last 2 months (85-88% correlation) it is fairly low.
International stocks – both emerging and developed markets – are also showing more of a “Go your own way” level of price movement. Correlations for developed markets to the S&P 500 are 88%, versus 92% last month. Emerging markets essentially trade the same as last month, with a 77% correlation to US stocks (versus 78% last month).
Domestic high yield corporate bonds have a current correlation to stocks of 56%, down from 75-81% two and three months ago.

There’s only two ways to read this data, and you have to choose one.

Behind door #1: After the better part of five years with investors clustering together for safety, we’re finally returning to a more normal capital market. Incremental buyers of risk assets are looking for actual outperformance versus their peers and the market as a whole. They are placing more aggressive bets, and this proactive attempt to outperform means asset prices are finally breaking out of their highly correlated patterns.

It is hard to overestimate how positive this outcome would be to stock markets around the world. The high correlation price action of the last few years may have generated some nice “New high” headlines along the way. But in reality, no one really cares. Asset flows remain weak, especially among retail investors as it related to U.S. stocks. But in a healthy market, where some groups just flat out trade better than others, some

Behind door #2: Nothing has fundamentally changed about how liquidity sloshes around capital markets, so any abnormally low correlations are likely a temporary anomaly. We pulled the prospective returns for the S&P 500 over one month, one quarter and one year for the 5 times average industry sector correlations dropped below 80%. You can see the dates and future market returns in the attached table.

The news isn’t good. Average one month returns when industry correlations drop below 80% are 0.02%, versus 0.90% for all months from April 2010 to now. Over one quarter, the S&P 500 returns (2.34%) after correlations get this low. The average for all months is positive 2.6%. For the following year, buying right as correlations hit their usual bottom results in an average return of 8.46%, or over 100 basis points less than the annual average of 9.8% over the period.

The bottom line is that we aren’t necessarily calling a top – that’s a fool’s game, as we noted up top. Still, the data doesn’t lie. Low current correlations seem to be a sign of complacency, similar to a low CBOE VIX Index. So celebrate a little, if you must. But drink in moderation.

and the relationship between the US equity market and the rest of the world has entirely decorrelated (left) as inidividual names in the S&P 500 have become the least correlated in over 5 years...

http://www.zerohedge.com/news/2013-04-12/gold-bitcoined-bonds-and-yen-soar-dow-back-unch-course

Gold Bitcoined, Bonds And Yen Soar, Dow Back To Unch (Of Course)

Submitted by Tyler Durden on 04/12/2013 16:21 -0400

Market Breadth

Precious Metals

Yen

Gold was Bitcoin'd (or Baumgartner'd) as it suffered its biggest daily drop since LTRO2 on 2/29/12. The JPY rallied over 1% - its biggest rise in 7 weeks. 10Y Treasuries had their best day in 7 weeks. Macro data was absymal. But it was evident that the only thing mattered was a new high close for the Dow - as we noted 10 minutes before the close:

And thanks to some help from the old ramp standbys - HYG and VIX - they nearly made it (but not quite) as the Dow ended -0.08 points rallying 75 points off the lows on the worst macro data day in months, with the EURUSD ramping just the right amount over 1.31.

Not a good day for Commodities... gold...

A Great day for bonds...

Not a good day for JPY carry traders and the rest of Western Civilzation banking on Abenomics to save the world...

But The Dow came through so mom and pop wouldnt even know the stuff had hit the economic fan...

The S&P did not have such a sgood day though once Europe closed the algos were in charge and we oscillated around VWAP... and closed prefectly balance at VWAP...

But FX land was more active today than it has been a week or two...

as Treasuries reversed almost all their losses on the week...

Not a fun week for precious metals (or oil for that matter)...

VIS compressed back to the market (as hedges were lifted) but we note that market breadth was weak - suggesting the macro hedges were lifted as single-name positions were reduced also...

Charts: Bloomberg and Capital Context

http://www.zerohedge.com/news/2013-04-12/usdjpy-plummets-after-us-treasury-says-it-should-refrain-competitive-devaluation

USDJPY Plummets After US Treasury Says It Should Refrain From "Competitive Devaluation"

Submitted by Tyler Durden on 04/12/2013 16:38 -0400

Curious why the USDJPY is in freefall after hours? Thank Jack Lew, and the after the close release of the semi-annual "Report to Congress on International Economic and Exchange Rate Policies." Traditionally the place where many have looked to see if the US would declare China a currency manipulator (which will never happen for obvious reasons), this time there was a big Easter egg lying in wait for those who did a word search for "competitive devaluation" - namely that it was located in the section discussing Japan.

To wit:

In order to support a stronger economic recovery and increase potential growth, it is important that Japan take fundamental and thoroughgoing steps to increase the dynamism of the domestic economy, by easing regulations that unduly deter competition in its domestic economy. Macroeconomic stimulus will be supportive in the short-term but cannot be a substitute for structural reform that raises productivity and trend growth. We will continue to press Japan to adhere to the commitments agreed to in the G-7 and G-20, to remain oriented towards meeting respective domestic objectives using domestic instruments and torefrain from competitive devaluation and targeting its exchange rate for competitive purposes.

"Refrain from competitive devaluation" - the last thing anyone who was long the USDJPY into the weekend wants to hear. Which is precisely why suddenly far fewer wanted to be long the USDJPY, which has crashed 50 pips in the last few minutes and is in literal freefall on this very confusing report, according to which it is not ok for Japan to print $80 billion per month, but it is perfectly ok for the US.

http://www.zerohedge.com/news/2013-04-12/visualizing-orderly-japanese-bond-market

Visualizing The 'Orderly' Japanese Bond Market

Submitted by Tyler Durden on 04/12/2013 09:08 -0400

Overnight, Japanese government bond (JGB) markets had yet another turbulent trading session. Despite reassurances from Kuroda that the bond-buying plan would continue as expected, JGB prices (and even more so yields) smashed around in a huge relative range. The market is already extremely anxious of this disorderly behavior as Japanese interest rate implied volatility (used to hedge against - or bet on - disorderly markets) have spiked to ten-year highs (and to their 3rd highest ever). This is no surprise as the following charts show, the realized volatility in this market is at generational extremes.

Realized volatility has exploded...

as has Japanese interest rate implied volatility...

as daily ranges are 4 to 8 times ten year averages...

So we are one week into the biggest and most experimental monetization scheme ever in history and the quadrillion Yen bond market is in total disarray. What could go wrong?

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100024025/cyprus-goes-from-bad-to-worse-by-the-day-so-does-portugal/

Cyprus goes from bad to worse by the day; so does Portugal

By Ambrose Evans-Pritchard Economics Last updated: April 12th, 2013

324 Comments Comment on this article

Merkel has told the Bundestag not to increase the Cyprus rescue package

On cue, Angela Merkel's Christian Democrat base in the Bundestag has warned that there can be no increase in the EU-IMF rescue package for Cyprus.

The Cypriot people alone must carry the extra cost of up to €5.5bn beyond what was already agreed in the €17.5bn deal in March.

"Should that not be possible, the assent of the German Bundestag next week is out of the question," said Christian von Stetten, a key member of the finance committee.

"The escalating gap in funding is huge and confirms my doubts in the finance framework prepared by the Troika and the Republic of Cyprus. It is going the way of Greece. Ever more funding gaps keep coming to light," he said.

So we have a stand-off yet again. Cypriot president Nicos Anastasiades says the country needs "extra assistance", and indeed it does since the extra demands on Cyprus are a further 28pc of GDP.

If the eurozone refuses to offer any further help, there must surely be a greater temptation to withdraw from the euro and default on sovereign debt in a classic restructuring deal with the IMF.

That is what the IMF is there to do. Such restructurings have been done countless times across the world over the last 50 years. It is traumatic, but countries usually recover after a couple of years.

The crucial point for the Cypriot people is that the cost-benefit calculus is moving in that direction. Whether they have understood this is another matter. They may in due course as the ghastly reality of Troika policy hits them.

And just to clarify, the reason why the rescue costs are shooting up is because the Troika has finally recognised that its treatment of Cyprus is pushing the economy over a cliff. The depressionary spiral itself is causing the numbers to spike.

So Cyprus is very far from being solved, and so is Portugal. A fresh Troika leak, this time to the Pink Sheet, has confirmed what anybody following Portugal already suspected. The country is stuck in a debt-compound trap. The economic slump is proving much deeper than forecast. The deficit has been rising not falling, in spite of austerity cuts.

Specifically, it will need to need to borrow €14.1 billion in 2014, and €15bn in 2015. This is 30pc more than required when the crisis blew up in 2011. The average interest rate will be higher than it was then.

The leaked report said: "Portugal has the challenge of needing to finance more than pre-crisis albeit with a sub-investment grade rating. There is substantial funding risk for Portugal given that it is still subject to substantial vulnerabilities at the end of the programme."

"The task of issuing medium and long-term debt above what is already held by market participants might be very demanding without an improvement in Portugal's sub-investment grade rating and the build-up of a stable investor base."

In other words Portugal is in a deeper hole after its €78bn bail-out than it was before. Public debt will reach 124pc of GDP this year. The "financing burden" will keep rising until 2017.

Which raises the question, what will Germany and the northern creditor states do if/ when it becomes undeniable that Portugal need a second rescue?

They have given a solemn pledge (another one) that there will be no repeat of the `PSI' private haircut on sovereign debt that is deemed to have been a disaster in Greece. So they have three choices:

a) They violate their pledge and impose a Greek-style debt restructuring, destroying bond market confidence and risking contagion to Spain and Italy.

b) They take the money from Portuguese bank accounts, regardless of whether the banks have done anything wrong.

c) They pay for it themselves and acknowledge to their parliaments at long last that it costs real taxpayer money to hold EMU together.

I suppose there are other possibilities. They could try to bully the ECB into buying debt, but there are obvious limits to this. Germany's Jorg Asmussen has to agree.

There is of course great sympathy in Berlin, The Hague, and Helsinki for the free-market team of premier Pedro Passos Coelho. His drive for austerity has been nothing less than heroic.

However, there is less sympathy for him at home. The austerity consensus in the Assembleia has collapsed.

Ex-premier and elder statesman Mario Soares said this morning that all opposition parties on the Left – socialists, Bloco, communists – should get together to "bring down" the government.

"In its eagerness to do the bidding of Senhora Merkel, they have sold everything and ruined this country. In two years this government has destroyed Portugal. We absolutely have to end this austerity," he said.

He also said to Antena 1 that Portugal will "never be able to pay its debts however much it impoverishes itself. If you can't pay, the only solution is not to pay."

"When Argentina was in crisis it didn't pay. Did anything happen? No, nothing happened he said."

Raoul Ruparel from Open Europe said Portugal has now exhausted its "internal devaluation" policy. "Portugal's austerity programme is coming up against huge political and constitutional limits. The previous political consensus in parliament has evaporated. Fundamentally, as so often in this crisis, the eurozone is now coming up against the full force of national democracy. "

The top court ruled a week ago that pay and pension cuts for public workers in Mr Passos Coelho's budget are illegal, driving a coach and horses through the government's whole strategy.

Exports are doing well, but the country's trade gearing is too low (30pc of GDP) to offset the violent contraction in internal demand. External debt is 300pc of GDP. The International Investment Position is 105pc of GDP in the red.

And let me close with this chart that Raoul has put together. It shows that the gap in unit labour costs with Germany is no longer closing. It is widening again.

Click to enlarge

As predicted by so many, the attempt to drive down wages in modern democracy is not only brutal but often impossible. What you gain from wage compression you lose from lagging productivity as investment collapses.

Did nobody ever explain this to them?

http://www.telegraph.co.uk/finance/financialcrisis/9990651/Portugals-elder-statesman-calls-for-Argentine-style-default.html

Portugal’s elder statesman calls for 'Argentine-style' default

Portugal's leading elder statesman has called on the country to copy Argentina and default on its debt to avert economic collapse, a move that would lead to near certain ejection from the euro.

A protester holds a flare during a demonstration in Lisbon last year Photo: AFP

By Ambrose Evans-Pritchard

4:59PM BST 12 Apr 2013

88 Comments

Mario Soares, who steered the country to democracy after the Salazar dictatorship, said all political forces should unite to “bring down the government” and repudiate the austerity policies of the EU-IMF Troika.

“Portugal will never be able to pay its debts, however much it impoverishes itself. If you can’t pay, the only solution is not to pay. When Argentina was in crisis it didn’t pay. Did anything happen? No, nothing happened," he told Antena 1.

The former socialist premier and president said the Portuguese government has become a servant of German Chancellor Angela Merkel, meekly doing whatever it is told.

“In their eagerness to do the bidding of Senhora Merkel, they have sold everything and ruined this country. In two years this government has destroyed Portugal,” he said.

Dario Perkins from Lombard Street Research said a hard-nosed default would force Portugal out of the euro. “It would create incredible animosity,” he said. “Germany would be alarmed that other countries might do the same so it would take a very tough line.”

Mr Perkins said all the peripheral states are “deeply scared” of being forced out of EMU. “They fear their economies would collapse, which is ridiculous. But in the end voters are going to elect politicians who refuse to along with austerity as we are seeing in Italy, and the EU will lose control,” he said.

Raoul Ruparel from Open Europe said Portugal had reached the limits of austerity. “The previous political consensus in parliament has evaporated. As so often in this crisis, the eurozone is coming up against the full force of national democracy.”

The rallying cry by Mr Soares comes a week after Portugal’s top court ruled that pay and pension cuts for public workers are illegal, forcing premier Pedro Passos Coelho to search for new cuts. The ruling calls into question the government’s whole policy “internal devaluation” aimed at lowering labour costs.

A leaked report from the Troika warned that the country is at risk of a debt spiral, with financing needs surging to €15bn by 2015, a third higher than the levels that precipitated the debt crisis in 2011. “There is substantial funding risk,” it said.

In a rare piece of good news, eurozone finance ministers agreed on Friday to extend repayment of rescue loans for Portugal and Ireland by a further seven years, reducing the pressure for a swift return to markets.

Brussels said both countries are “still highly vulnerable” to forces beyond their control, and deserve a “strong signal” of support. Critics say it is too little, too late. Fast-moving events on the ground now have a will of their own.

http://www.zerohedge.com/contributed/2013-04-12/i-illustrate-how-irish-banking-cancer-spreads-uk-taxpayer-and-metastasizes-th

I Illustrate How The Irish Banking Cancer Spreads To The UK Taxpayer And Metastasizes Through US Markets!

Submitted by Reggie Middleton on 04/12/2013 11:45 -0400

US retail investors and financial media tend to be a little... well... US-centric. They tend to ignore a lot of international happenings even though these events can, and often do, have a direct impact on the immediate US financial situation. I have ranted, raved, preached and prognosticated on the interconnectedness, and the inherent risks therein, of the global banking system. From my highly analytical ravings on Bear Stearns (pre-bust Is this the Breaking of the Bear?) to my more free form rants on Lehman (pre-bustIs Lehman really a lemming in disguise?), I think I have proven that being the lone voice in the investment wilderness is not necessarily an indicator of that voice being wrong. See Who is Reggie Middleton? for more on that topic. For now, let's continue where we left off in "Ireland, You May Very Well Be Bust & I Make No Apologies For What I'm About To Show You" wherein I'm about to clearly demonstrate how contagion easily traipsed through geographic borders from Ireland to the UK to the US, and how this big bank seemingly omitted the evidence of such.

* * *

Ulster Bank Ireland Ltd, has charges registered (seeSupporting Charge Documents) with the Irish Companies Registration Office (CRO). The bank gave a first floating charge in favour of the Central Bank of Ireland (an arm of the European Central Bank) and the Financial Services Authority of Ireland encompassing “all its right, title, interest and benefit, present and future, in and to each of the securities of such a class or description as may from time to time be designated by the European Central Bank as eligible for sale and/or purchase, as the case may be, by the Bank under its standard form for the time being of Master Repurchase Agreement, which specification may be made by reference to particular classes of repurchase transactions, and which are included in the schedule of Eligible Securities provided to the Bank from time to time.”.

These charges were registered with the CRO on 15th February 2008, yet there is no mention whatsoever of these charges in the Banks 2008 Annual Accounts (seeattached).

Ulster Bank is a 100% Owned Subsidiary of the UK (now taxpayer owned) Institution - The Royal Bank of Scotland (RBS)

This affects US investors as well and this piece should be well read by anyone in the US, UK or Ireland who has lost money investing in RBS/Ulster Bank Group.

rbs share price history

In 2008, RBS traded ADR’s in the U.S. under the symbol .NYSE:RBS. These ADR’s were traded OTC. This gives the SEC jurisdiction over the companies US securities.

What happened behind closed doors?

Ulster Bank gave a first floating charge in favor of the Central Bank of Ireland (an arm of the European Central Bank) and the Financial Services Authority of Ireland. U.S. investors would have had to rely on the contents of The Royal Bank of Scotland's 2008 Annual Accounts which apparently (in my opinion) concealed the existence of the CRO registered charges to the Bank of Ireland.

Ulster Bank RBS charge doc 2 Page 1

Ulster Bank RBS charge doc 2 Page 1 copy

Ulster Bank RBS charge doc Page 1

Ulster Bank RBS charge Doc to Pfizer International Bank Page 1

I also attach charge documents that Ulster Bank entered into with Pfizer International Bank. I cannot find these charges in any disclosures.

If you look at the attached charge documents from Ulster Bank to the Central Bank you will see that the wording is different when compared to the charge documents of the other Irish Banks. It specifically states that a first floating charge was created by the Deed of Floating Charge over Eligible Securities for Liabilities Arising in Target2-Ireland. Having said that I can see no mention of these charges in the Annual Accounts for 2008. On page 72 (28) of the Annual Accounts it gives the only details that I can find of charges registered. It states that A registered charge exists over the assets of the Group, securing all borrowings and other obligations in whatever form that relate to the Group's use of the Euroclear system, that are outstanding to Morgan Guaranty Brussels and to any other office of Morgan Guaranty Trust Company of New York. This looks as if it could be a double encumbrance of certain assets for the charge to the Central Bank of Ireland features very similar, all-encompassing language for Ulster Bank, which is a fully owned subsidiary of RBS. Although I'm not an international banking attorney, my layman's eye sees double counting of collateral barring a clause that somehow excludes that covered by the charge over Ulster Bank.

There are also two charge documents for Ulster Bank to Pfizer International Bank. One is for 2009 and the other for 2010. I can see no mention of these in the 2009and2010 Annual Accounts.

These charge documents are also not apparent in the recent bank ‘stress testing’ conducted by the European Banking Authority, at least not in the summary results that the EBA have made available, reference RBS Stress Test.

I cannot see how the charge documents are disclosed in theRBS annual accounts (annual report). I see it mentions that the Bank provides collateral in the form of securities in repurchase agreements (footnote page 41). On page 60 it states the Group engages in securitization transactions of its residential loans which are generally transferred to a special purpose entity. This likely relates to the cashflows and not the principal. The charge documents relate to the principal (the actual loan). The registered charge (page 72) exists over the assets of the Group, securing all borrowings and other obligations whatsoever that relate to the Group's use of the Euroclear system (privately owned by J.P.Morgan,http://en.wikipedia.org/wiki/Euroclear).

The charge documents are not covered in the Ulster Bank Annual Accounts or the SEC Group RBS Annual Report. I think that this is a serious misrepresentation of the Accounts/Annual Report. The charge is a floating charge over Secured Obligations (Repo Agreements) which means all present and future liabilities of Ulster Bank (100% owned by RBS). As stated Target2 is only a payment system. The true reasons for the charge increasingly appear to be that of emergency funding, for it also appears as if Ulster Bank was bust. This information should have been included in the SEC Group RBS Annual Report, especially when ADR's were being traded.

RBS Stress Tests

The afore-linked copy of theRBS Stress Testresults do not make it possible to determine whether the charge documents were included in the Stress Test, however it is worth pointing out that the charges do not appear in the annual accounts, so one could assume that they were not included in the stress test. The information is based on data supplied by each bank, via its respective national supervisor. Accuracy of this data is primarily the responsibility of the participating bank and national supervisor. This information has been provided to the EBA in accordance with Article 35 of EU Regulation 1093/2010. The EBA bears no responsibility for errors/discrepancies that may arise in the tables.

A Short Traipse Through Recent History & The Expense That Ultimately Befalls The UK Taxpayer

In 2007 Ireland had significant cross border exposure to UK and US banks through derivatives and property products. As I warned in 2007, the real estate bubble in the the US/UK popped in 2008, sending pathogenic contagion straight through the Irish banking system. The entire banking system started collapsing. On February 15, 2008, Ireland took extraordinary measures (which we will explore in depth a little later on) to mitigate said collapse, measures that many a layperson would deem misleading, if not fraudulent. RBS (Royal Bank of Scotland, one of the largest financial institutions in the countries of Ireland and the UK) was effectively nationalized by the UK and a bad bank was formed to purchase bad debt/products from the Zombie Irish banks in exchange for government bonds, backed by a country that just simply couldn't afford it.

It was the UK taxpayer that footed the bill for this nationalization - as per Wikipedia:

The bonus payments paid to RBS staff subsequent to the 2008 United Kingdom bank rescue package have led to controversy. Staff bonuses were nearly £1 billion in 2010, even though RBS reported losses of £1.1 billion for 2010. More than 100 senior bank executives were paid in excess of £1 million each in bonuses. Consequently, former CEO Fred Goodwin was stripped of his knighthood in mid-January, and newly appointed CEO Stephen Hester renounced his £1 million bonus after complaints over the bank’s performance.

82 percent of RBS' shares are now owned by the UK government, which bought RBS stock for £42 billion, representing 50 pence per share.In 2011, the shares were worth 19 pence, representing a taxpayer book loss of £26 billion ($40B). Historically, the RBS stock price went from a high of over 700 pence in early 2007 (taking into account a 3 for 1 stock split that took place later that year) to around 20 pence in late 2011.

... the UK Government (HM Treasury), as of 31 March 2012, holds and manages an 82% stake through UK Financial Investments Limited(UKFI), whose voting rights are limited to 75% in order for the bank to retain its listing on the London Stock Exchange. In addition to its primary share listing on the LSE, the company is also listed on the New York Stock Exchange. The group is based in Edinburgh, Scotland. In 2009, after the financial collapse, it was briefly the world's largest company by both assets (£1.9 trillion) and liabilities (£1.8 trillion). In 2012, the UK government announced plans to bid for the rest of the RBS shares that it did not own, as it felt that "while the taxpayer owns over 82pc of the bank following a bailout in 2008, they bear 100pc of the bank's huge liability risks".

Part and parcel of the RBS problems was its purchase of Ulster Bank and its exposure to the Irish lending issues!

The app below allows the UK Taxpayer to calculate for themselves exactly what their individual contribution (pro rata) is to the government bailout of RBS.Click here and scroll halfway down the page to access the bailout cost app!

I've taken the liberty of pre-populating the input fields for you, but if you don't agree with the numbers then by all means insert your own!

Following my warning in February of 2008, Lehman filed bankruptcy in September sending an additional set of contagion shock through Ireland and its banking system, causing Ireland to issues bonds and further indebt itself to save its Zombie banks – again! This time through blanket bank guarantees backed by the full faith of the government.

In September of 2010, a large swath of said government guarantees for the banks were about to expire. Reference this excerpt from the book “Zombie Banks: How Broken Banks and Debtor Nations Are Crippling the Global Economy”:

In September 2010, some of Ireland's government guarantees for bank debts were about to expire, which put U.S. Treasury officials on edge. If the guarantee wasn't renewed, the banks would likely default on their bonds, triggering the next event in line: a slew of credit default swap (CDS) contracts on Irish banks' debt. U.S. Treasury officials had reason to worry - the names backing those contracts were the largest U .S. banks, and they could end up paying billions in case of default. Any more weight on U.S. banks could be a tipping point to collapse. Treasury officials made inquiries to their counterparts at the Irish finance ministry asking about the course of action the country was planning to take and indicated their concern about possible default and its CDS repercussions. A year after having issued blanket guarantees on the banks' liabilities the Irish government once again didn't dare let the bank fail. Instead it ended up asking for financial assistance from the European Union (EU) and the International Monetary Fund (IIMF): the country had been pushed to the brink of collapse.

image002

Litigation

201294 r01o 09CV00300 Page 01

rbs litigation

_{Indications of capital shortfalls in the Ulster Bank arrangement:}

RBS had paid a total of €9.13 billion to Ulster Bank in capital contributions, in order to safeguard the bank’s capital reserves after writing off billions in impaired loans to Irish borrowers.http://businessetc.thejournal.ie/british-banks-bailed-ireland-out-e16bn-762258-Jan2013/. 24th Feb. 2012

ULSTER BANK’S parent company, Royal Bank of Scotland (RBS), injected as much as £4 billion (€4.7 billion) into Ulster Bank last year, bringing its total investment in its Irish subsidiary to £10 billion (€11.8 billion) since 2008.

http://www.irishtimes.com/business/sectors/financial-services/rbs-chief-insists-11-8bn-injected-into-ulster-bank-was-too-much-1.469092

If you have believe that the information above actually identifies a gross misrepresentation of fact, omission or outright fraud, simply contact the SEC and let them know that Reggie Middleton suggested they look into it. You can actually use this form to convey my message.

Those of you in Ireland who may not want to get "Cyprus'd", ie. have your bank accounts fund another bailout, should contact the Office of the Director of Corporate Enforcement.Click this link, and tell them Reggie from NYCsent 'ya. Seriously! The reason why Irish banks haven't been reformed was because not enough light has been shown on the activities. See avalid attempt at such here. This is the time, for the tea leaves foretell the next bank collapse & bailout will be funded directly out ofyourbank accounts, reference Ireland, You May Very Well Be Bust & I Make No Apologies For What I'm About To Show You for those who don't believe me. See Global Banking Crisis - How & Why YOU Will Get "Cyprus'd" for an example of a bank statement of a Cypriot who didn't take the regulation of his bank seriously!!!

And for those blokes in the UK, I suggest you drop a note to the Financial Conduct Authority. You canreach them via this link, tell them Reggie Middletonsent you. This was excerpted from their website (emphasis added):

We intervene when firms:

- treat consumers unfairly
- behave in ways that risk the integrity of the market

We supervise firms differently depending on their size and the nature of their business. This includes:

- continuous conduct assessment for large firms and regular assessment for smaller firms
- monitoring products and other issues to ensure firms play fair and don’t compromise consumer interests
- responding quickly and decisively to events or problems that threaten the integrity of the industry
- ensuring firms compensate consumers when necessary

Well, straight from the horse's mouth. Have at 'em. They should do the right thing, and EU media should pick up on this as well. You don''t want your 2,000+ pound/euro bank bailout investment to be handled solely by a blogger from NYC, do you???!!!

For paid subscribers, I've posted another potentially "Cyprus'd" EU bank with shortable US/LSE traded shares/options for subscribers, reference EU Bank Capital Confusion, Part 2 - Malarkey (you may subscribe here). Over the next 36 hours or so, I will be releasing an even bigger scandal that is even more far reaching. Stay tuned!!!

Catharsis Ours

Friday, April 12, 2013

Fear The Uncorrelated Stock Market

Gold Bitcoined, Bonds And Yen Soar, Dow Back To Unch (Of Course)

USDJPY Plummets After US Treasury Says It Should Refrain From "Competitive Devaluation"

Visualizing The 'Orderly' Japanese Bond Market

Cyprus goes from bad to worse by the day; so does Portugal

Portugal’s elder statesman calls for 'Argentine-style' default

Portugal's leading elder statesman has called on the country to copy Argentina and default on its debt to avert economic collapse, a move that would lead to near certain ejection from the euro.

I Illustrate How The Irish Banking Cancer Spreads To The UK Taxpayer And Metastasizes Through US Markets!

Ulster Bank is a 100% Owned Subsidiary of the UK (now taxpayer owned) Institution - The Royal Bank of Scotland (RBS)

What happened behind closed doors?

RBS Stress Tests

A Short Traipse Through Recent History & The Expense That Ultimately Befalls The UK Taxpayer

Part and parcel of the RBS problems was its purchase of Ulster Bank and its exposure to the Irish lending issues!

The app below allows the UK Taxpayer to calculate for themselves exactly what their individual contribution (pro rata) is to the government bailout of RBS.Click here and scroll halfway down the page to access the bailout cost app!

Litigation

_{Indications of capital shortfalls in the Ulster Bank arrangement:}

_{Other hard hitting pieces on the resurgent EU banking crisis}

No comments:

Post a Comment

Friday, April 12, 2013

Fear The Uncorrelated Stock Market

Gold Bitcoined, Bonds And Yen Soar, Dow Back To Unch (Of Course)

USDJPY Plummets After US Treasury Says It Should Refrain From "Competitive Devaluation"

Visualizing The 'Orderly' Japanese Bond Market

Cyprus goes from bad to worse by the day; so does Portugal

Portugal’s elder statesman calls for 'Argentine-style' default

Portugal's leading elder statesman has called on the country to copy Argentina and default on its debt to avert economic collapse, a move that would lead to near certain ejection from the euro.

Related Articles

I Illustrate How The Irish Banking Cancer Spreads To The UK Taxpayer And Metastasizes Through US Markets!

Ulster Bank is a 100% Owned Subsidiary of the UK (now taxpayer owned) Institution - The Royal Bank of Scotland (RBS)

What happened behind closed doors?

RBS Stress Tests

A Short Traipse Through Recent History & The Expense That Ultimately Befalls The UK Taxpayer

Part and parcel of the RBS problems was its purchase of Ulster Bank and its exposure to the Irish lending issues!

The app below allows the UK Taxpayer to calculate for themselves exactly what their individual contribution (pro rata) is to the government bailout of RBS.Click here and scroll halfway down the page to access the bailout cost app!

Litigation

Indications of capital shortfalls in the Ulster Bank arrangement:

Other hard hitting pieces on the resurgent EU banking crisis

No comments:

Post a Comment

_{Indications of capital shortfalls in the Ulster Bank arrangement:}

_{Other hard hitting pieces on the resurgent EU banking crisis}