... he realized it was too late to bail out ...
The good news? Home sales are rising. The bad news? The prices fetched.
Hedge funds are still driving markets down as they unload shares to acquire liquidity to pay off debt, analysts say.
This scorched earth strategy has seen hedge funds drop more than 10%, losing $210bn in the third quarter on a worldwide share portfolio put at $1.72 trillion.
"Part of this industry is dying, maybe half," said Eric Galiegue, director of analysts Valquant.
"So they are liquidating their assets as an emergency, in an animal fear, taking no account of economic news."
Fin24 | Markets brace for crucial week
Last week, banks borrowed a record $437 billion per day, topping the previous week's $420 billion per day a week earlier. Hundreds of banks cannot meet their capital requirements without regular low interest loans from the Federal Reserve. The banking system is in shambles. The FDIC needs to determine which banks can be saved and which need to be shut down, otherwise the insolvent banks will use the money they get from the Treasury on risky bets to dig their way out of bankruptcy. Without restrictions on how they can issue credit, many of the banks will engage in the same reckless behavior and speculation that brought on the current calamity.
Mike Whitney | Down For The Count
.... and was wiped out.
The Chicago Board Options Exchange Volatility Index, “the Fear Index”, surged to 79.13 on Friday, the highest in its 18-year history, while the Dow clawed its way back from 500 points down to a 312 point loss on the day. The massive blow-off in stocks is mainly the result of ongoing deleveraging among the hedge funds which are dumping shares in at a record pace to cover the dwindling value of their asset base. According to the New York Times: “Hedge funds lost an estimated $180 billion during the last three months and some are near collapse. Investors are demanding their money back, and Wall Street is bracing for a shake-out in the $1.7 trillion industry.” If a large fund, like Citadel, goes down, it will create a black hole in the financial system, similar to the loss of Lehman Bros. and, once again, the US Treasury will have to come to the rescue by providing a multi-billion dollar taxpayer bailout.
Mike Whitney | Meet the World’s New Reserve Currency
Davos organizers also say they failed to play tough with the financial-industry bosses, opting to accept their funding and let them turn Davos into a rave-up for Wall Street excesses.
"The partying crept in," says Klaus Schwab, the 70-year- old WEF founder and executive chairman. "We let it get out of control, and attention was taken away from the speed and complexity of how the world's challenges built up."
[...]
Each January, global financial titans and their entourages gathered in the Alpine hamlet. A band of fluegelhorns wandered in hotel lobbies, heralding the arrival of delegates such as Lehman Brothers Holdings Inc. CEO Richard Fuld Jr., Freddie Mac CEO Richard Syron and U.S. Treasury Secretary Henry Paulson, along with actresses such as Angelina Jolie and Sharon Stone.
Bundled in cashmere coats and goose-down parkas, the WEF's 2,500 "global leaders" set off to attend a medley of 500 public and private sessions designed to isolate economic problems, clarify disturbing market trends and forge innovative solutions.
[...]
As for the merrymaking, Schwab vows "it won't happen again." Unlike Bretton Woods, companies will still pay as much as $750,000 each in annual fees to send executives to Davos.
William Browder, founder of Hermitage Capital Management Ltd. in London and an eight-year WEF veteran, isn't so sure Schwab can pull it off.
"An exercise in moderation is something the private sector doesn't do very well," Browder says.
Bloomberg | 'Out of Control' CEOs Spurned Davos Warnings on Risk
America's no democracy and as a result of the meltdown and the surrender of our power to Wall Street's new Disaster Capitalism we are morphing into what one WWII dictator called "corporatism," a "merger of state and corporate power," kind of like what's going on now with Goldman Sachs' ex-boss as de facto president.
MarketWatch | Wall Street's 'Disaster Capitalism for Dummies'
