The Market Ticker

Yet more BS Fedspeak, this time in the mainstream media:

In separate speeches, Janet Yellen, president of the Federal Reserve Bank of San Francisco, and Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, warned that rising unemployment could crimp consumers, restraining the recovery. Consumer spending accounts for about 70 percent of economic activity.

That's because there is no real economic recovery at all.

So why is the stock market up so much?

More than happy to show 'ya.

Two charts should suffice:

That is an overlaid chart (as close as I can easily get them to register) on the dollar and The S&P 500 from the March lows to today.

Notice the near-perfect inverse correlation.  The Dollar goes up, the market goes down.  The Dollar goes down, the market goes up.

Now today, literally minute-by-minute:

Same correlation - near-perfect.

Folks, you don't have to engage in any sort of "conspiratorial" thinking on this whatsoever.  You only need examine the facts.

The rally in the market has exactly nothing to do with the economy and the outlook for it.  It is tied to one and only one thing - the decline in the dollar.  

A WEAKER, EVEN COLLAPSING, DOLLAR IS NOT COMMENSURATE WITH OR INDICATIVE OF A STRONGER ECONOMY.

You're free to believe in any thesis you'd like with regards to economic recovery.  But a strong economy is correlated with a stronger currency - that is, the underlying strength of America, along with her ability to support her currency via current and future production, which translates into the ability to raise tax revenues and thus cover debt.

Since March The Federal Reserve and Federal Government have in fact promulgated and prosecuted policies that do the exact opposite.  The stock market has responded not to forward economic prospects, as is often claimed, but rather to the "hot money" flows of foreign and domestic speculators and a dollar-based carry trade engendered by The Fed's zero-percent interest rates.

Yes, the stock market could go to all-time highs - for a short while - if this is allowed to continue.  But oil (priced in dollars) would be $300 and the dollar would be at 40 - everything you buy that is imported would literally double (or more) in price, and your standard of living, since energy is in everything, would be cut in half - or worse.

How well will the stock market do over the intermediate and longer term when the 70% of the economy that is consumer spending (that's you, dear reader!) is destroyed by ramping import costs - whether the government calls that "inflation" or not?

Japan tried this same game when they got in trouble 20 years ago and they failed to produce lasting economic growth and prosperity.  What they did produce was near-exact correlated market rallies and Yen devaluations, but 20 years later, despite huge rallies in the stock market as we have seen in ours, The Nikkei remains some 60% off it's all-time high, with no realistic prospect of reaching that high at any time in the foreseeable future.

The mainstream media will not show you the above charts, as they put the lie to any claim that the market is "foreshadowing" economic recovery in the next six to twelve months.

It is doing no such thing - it is responding to hot money flows that are being intentionally generated and, if you follow them as an investor (rather than as a minute-by-minute trader) you will be crushed, just as those who bet on recovery in Japan following their original collapse were.

Bernanke, Geithner and the other stooges in our government and media are intentionally misleading you.

Again.

Just when you thought it might be safe to go back in the water with regards to the banking system - and markets:

The flood of expiring debt will hit the US and the UK hard – with $2,000bn of debt coming due by 2012 – and could curb banks’ profits or force them to charge individuals and companies more for their services.

....

Moody’s estimates that a lender wanting to refinance a short-term government-guaranteed bond with 10-year paper could see costs rise nearly 7 percentage points.

The problem is this: The banks, during the "embezzlement years" (that's the housing bubble years of 03-07 and into the crisis up to now) have done the old "borrow short and lend long" game.

But the borrowing was driven down in cost by reducing maturity - in this case, it dropped from about 7 to 4 years over the last half-decade.  In the US it was even worse - banks "worked down the curve" to about 3 years as of 2009.  The Fed and FDIC made this considerably worse in 2008 with the guarantee programs for short-term debt, which further encouraged financial institutions to shift down the curve.

7 years roughly matches the duration of most people's home ownership experience, and thus is a reasonable "duration match" for similar instruments.  Ditto for commercial real estate, which typically is financed on 5 or 10 year terms, interest-only, then is rolled over.

Duration mismatches are a problem, because if interest costs rise while your money is still outstanding you can find yourself in a "negative earnings" situation - that is, it can cost you more to borrow than the rate you lent at!

Banks try to hedge this off with.... you guessed it.... derivatives.  Off-exchange derivatives, in many if not most (up to now) cases.

Thus the huge notional outstanding value of interest-rate swaps.

So what happens when the cost of borrowing goes up?

More importantly, what happens if it goes up by as much talked about by Moody's - seven percent?

Well let's see, you borrow at 7% (or is that 10%, since that's the margin, and that old debt was at 3%, right?) but you lent it out for 10 years at 5%.... hmmmm.... what did you say your leverage ratio was again, and how secure is the counterparty on that interest-rate swap you purchased $100 billion worth of swaps from to hedge this risk?

This is the "Discussion Draft" of Dodd's financial reform bill.

Commentary will be forthcoming; Ticker posted so you have a place to obtain a copy "easily" if desired.

As this is another 1k+ page monster (1136 pages in this case) it may take a day or two for me to read it all.

The link above should open the PDF for you.

Here is the claimed "discussion points" that are allegedly addressed:

Senate Committee on Banking, Housing, and Urban Affairs, Chairman Chris Dodd (D-CT) Contact: Kirstin Brost/Justine Sessions, 202-224-7391

Consumer Financial Protection Agency: Creates an independent watchdog to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, while prohibiting hidden fees, abusive terms, and deceptive practices.

Ends Too Big to Fail: Prevents excessively large or complex financial companies from bringing down the economy by: creating a safe way to shut them down if they fail; imposing tough new capital and leverage requirements and requiring they write their own "funeral plans"; requiring industry to provide their own capital injections; updating the Fed’s lender of last resort authority to allow system-wide support but not prop up individual institutions; and establishing rigorous standards and supervision to protect the economy and American consumers, investors and businesses.

Protects Against Systemic Risks: Creates an independent agency with a board of regulators to identify and address systemic risks posed by large, complex companies, products, and activities before they threaten the stability of the financial system. The agency could require companies that threaten the economy to divest some of their holdings.

Single Federal Bank Regulator: Eliminates the convoluted system of multiple federal bank regulators to increase accountability and end unnecessary overlap, conflicting regulation, and "charter shopping;" keeps in place the healthy dual banking system that governs community banks.

Executive Compensation and Corporate Governance: Provides shareholders with a say on pay and corporate affairs with a non-binding vote on executive compensation and director nominations.

Closes Loopholes in Regulation: Eliminates loopholes that allow risky and abusive practices to go on unnoticed and unregulated - including loopholes for over-the-counter derivatives, asset-backed securities, hedge funds, mortgage brokers and payday lenders.

Protects Investors: Provides tough new rules for transparency and accountability from investment advisors, financial brokers and credit rating agencies to protect investors and businesses.

Enforces Regulations on the Books: Strengthens oversight and empowers regulators to aggressively pursue financial fraud, conflicts of interest and manipulation of the system that benefit special interests at the expense of American families and businesses. 2

Why Change Is Needed: The economic crisis was driven by an across-the-board failure to protect consumers. When consumer protections are handled by regulators whose primary responsibility is to safeguard the profitability of the companies they regulate, consumer protections don’t get the attention they need. The result has been unfair, deceptive, and abusive practices being allowed to spread unchallenged, nearly bringing down the entire financial system.

 Consumer Protections in One Place: Consolidates consumer protection responsibilities currently handled by the Office of the Comptroller of the Currency, Office of Thrift Supervision, Federal Deposit Insurance Corporation, the Federal Reserve, the National Credit Union Administration, and the Federal Trade Commission.

 Independent: Led by a 5 member board with an independent director. The Chairman of the Financial Institutions Regulatory Administration will have a seat on the board.

 A Watchdog with Real Teeth: Unites rule-writing, supervision, and enforcement for consumer protection in a single, stand-alone agency with broad authority to investigate and react to abuses as they develop.

 Able to Act Fast: With this agency on the lookout for bad deals and schemes, consumers won’t have to wait for Congress to pass a law to be protected from bad business practices.

 Educates: Creates a new Office of Financial Literacy.

 Regulates Shadow Banking Industry: Levels the playing field for insured banks by regulating the shadow banking industry, such as mortgage brokers and payday lenders, for the 1st time and ensures that companies offering customers the same products receive the same regulatory treatment.

 Accountability: Makes one agency accountable for consumer protections. With many agencies sharing responsibility, it’s hard to know who is responsible for what, and easy for emerging problems that haven’t historically fallen under anyone’s purview, to fall through the cracks.

 Tougher State Laws: Allows states to pass tougher consumer protections that apply to all lenders, preventing federal regulations from preempting stronger state laws.

 Works with Bank Regulators: Coordinates with other regulators when examining banks to prevent undue regulatory burden.

 Bases Supervision on Risk: Focuses resources on companies that pose the biggest risk to consumers - mortgage bankers, brokers, finance companies and the largest institutions.

Why Change is Needed: The economic crisis introduced a new term to our national vocabulary – systemic risk.

 Strong and Independent: Governed by an independent chairman, appointed by the President and confirmed by the Senate, to provide insulation from political manipulation. The board will have 9 members including the federal financial regulators and two independent members. The board members' diverse areas of expertise will strengthen the board’s ability to identify and respond to emerging risks throughout the financial system.

 Tough to Get Too Big: Writes increasingly strict rules for capital, leverage, liquidity, risk management and other requirements as companies grow in size and complexity, imposing significant costs on companies that pose risks to the financial system.

 Break Up Large, Complex Companies: Gives the regulators the authority to break up large, complex companies if they pose a threat to the financial stability of the United States.

 Close Gaps in Regulation: Identifies unregulated financial companies that pose systemic risk and assigns them to a federal regulator for supervision.

 Lean and Mean: Expected to be staffed with a highly sophisticated staff of economists, accountants, lawyers, former supervisors, and other specialists. With just rule writing authority and no direct supervision, the agency can remain small but effective.

 Make Risks Transparent: Collects and analyzes data to identify and monitor emerging risks to the economy and make this information public in periodic reports and testimony to Congress twice a year.

 Oversight of Important Market Utilities: The Agency for Financial Stability will identify systemically important clearing, payments, and settlements systems to be regulated by the Federal Reserve.

Why Change is Needed: As long as giant firms (and their creditors) believe the government will prop them up if they get into trouble, they only have incentive to get larger and take bigger risks, believing they will reap any rewards and leave taxpayers to foot the bill if things go wrong.

 Discourage Excessive Growth: Imposes increasingly strict standards for companies as they grow larger, more complex, or more interconnected, including heightened capital, leverage, and liquidity requirements, that ensure these companies have greater resources to deal with financial shocks.

 Require Companies Provide Their Own Capital Injections: Requires institutions to issue long-term hybrid debt securities that will provide them with capital during a systemic crisis so failing institutions can provide their own life support.

 Funeral Plans: Requires large, complex companies to periodically submit plans for their rapid and orderly shutdown should the company go under. Companies will be hit with higher capital requirements and subject to restrictions on growth and activity as well as required divestment if they fail to submit acceptable plans. Plans will help regulators understand the structure of the companies they oversee and serve as a roadmap for shutting them down if the company fails. Significant costs for failing to produce a credible plan create incentives for firms to rationalize structures or operations that cannot be unwound easily.

 Orderly Shutdown: Creates a mechanism for the FDIC to unwind failing systemically significant financial companies through receivership, but not open assistance. Costs of unwinding these companies will ultimately be charged to financial firms with assets of over $10 billion, not to the taxpayers.

 Limit Federal Reserve Lending: Updates the Federal Reserve’s 13(3) lender of last resort authority to allow system-wide support for healthy institutions or systemically important market utilities during a major destabilizing event, but not to prop up individual institutions.

Why Change is Needed: Today, we have a convoluted system of bank regulators created by historical accident. There are 4 federal banking agencies that oversee national and state banks and federal and state thrifts. The result has been charter shopping, where firms look around for the regulator that will go easiest on them and fee-funded regulators go easy on those they regulate in order to keep their business, as well as a mess of overlaps, redundancies, and blurred lines of responsibility.

 Independent: Headed by an independent chairman appointed by the President and confirmed by the Senate, a Vice Chairman experienced in state banking regulation, and a board including the chairmen of the FDIC and the Federal Reserve and two other independent members. It will be funded primarily by assessments on the industry.

 Single Focused Agency: Combines the functions of the Office of the Comptroller of the Currency and the Office of Thrift Savings, the state bank supervisory functions of the Federal Deposit Insurance Corporation and the Federal Reserve, and the bank holding company supervision authority from the Federal Reserve.

 Dual Banking System: Preserves the dual banking system, leaving in place the state banking system that governs most of our nation’s community banks.

 Separate Community Bank Division: Establishes a separate division within the new regulator to regulate community banks given the different supervisory issues they pose.

 Eliminates Charter Shopping: Stops financial institutions from choosing the easiest regulator, and stops fee-funded regulators from going easy on those they regulate to keep their business.

 Increases Accountability: Having a single regulator will mean an identifiable agency is held responsible for shortcomings in the banking system.

 Speeds Action, Increases Efficiency: Ends slow, cumbersome, coordinated rulemaking that creates extra red tape and inconsistent enforcement of the same rules by agencies. Overlaps impose unnecessary costs on regulated institutions and their customers.

 Focuses the FDIC and the Federal Reserve: The FDIC will focus on its jobs as deposit insurer and resolver of failed institutions, retaining backup examination authority over troubled banks and gaining additional authority to accompany the new agency on examinations of healthy banks and holding companies to ensure it has sufficient information to perform its insurance functions. The Federal Reserve will focus on monetary policy without being distracted by responsibilities for bank oversight and consumer protections. The Federal Reserve will continue to play a key role in assessing financial stability and have guaranteed access to financial institutions and any needed information.

Why Change is Needed: The over-the-counter derivatives market has exploded in the last decade – from $91 trillion in 1998 to $592 trillion in 2008. During last year’s financial crisis, concerns about the ability of companies to make good on these contracts and the lack of transparency about what risks existed caused credit markets to freeze. Investors were afraid to trade as Bear Stearns, AIG, and Lehman Brothers failed because any new transaction could expose them to more risk.

 Closes Regulatory Gaps: Provides the SEC and CFTC with authority to regulate over-the-counter derivatives so that irresponsible practices and excessive risk-taking can no longer escape regulatory oversight. Uses the Administration’s outline for a joint rulemaking process with the Agency for Financial Stability stepping in if the two agencies can’t agree.

 Central Clearing and Exchange Trading: Requires central clearing and exchange trading for derivatives that can be cleared and provides a role for both regulators and clearing houses to determine which contracts should be cleared. Requires the SEC and the CFTC to pre-approve contracts before clearing houses can clear them.

 Safeguards for Un-Cleared Trades: Requires traders post margin and capital on un-cleared trades in order to offset the greater risk they pose to the financial system and encourage more trading to take place in transparent, regulated markets.

 Market Transparency: Requires data collection and publication through clearing houses or swap repositories to improve market transparency and provide regulators important tools for monitoring and responding to risks.

Why Change is Needed: Hedge funds are responsible for huge transfers of capital and risk, but generally operate outside the framework of the financial regulatory system, even as they have become increasingly interwoven with the rest of the country’s financial markets.

 Fills Regulatory Gaps: Ends the "shadow" financial system in which hedge funds and other private pools of capital operate by requiring that they provide regulators with critical information.

 Register with the SEC: Requires hedge funds to register with the SEC as investment advisers and provide information about their trades and portfolios necessary to assess systemic risk. This data will be shared with the systemic risk regulator and the SEC will report to Congress annually on how it uses this data to protect investors and market integrity.

 Independent Custody of Client Assets: Requires investment advisers to use independent custodians for client assets to prevent Madoff-type frauds.

 Greater State Supervision: Raises the assets threshold for federal regulation of investment advisers from $25 million to $100 million, a move expected to increase the number of advisors under state supervision by 28%. States have proven to be strong regulators in this area and subjecting more entities to state supervision will allow the SEC to focus its resources on newly registered hedge funds.

Office of National Insurance: Creates a new office within the Treasury Department to monitor the insurance industry, coordinate international insurance issues, and requires a study on ways to modernize insurance regulation and provide Congress with recommendations.

Streamlines the regulation of surplus lines insurance and reinsurance through state-based reforms. 8

Why Change is Needed: Rating agencies market themselves as providers of independent research and in-depth credit analysis. But in this crisis, instead of helping people better understand risk, they failed to warn people about risks hidden throughout layers of complex structures.

 New Office, New Focus at SEC: Creates an Office of Credit Ratings at the SEC with its own compliance staff and the authority to fine agencies. The SEC is required to examine Nationally Recognized Statistical Ratings Organizations at least once a year and make key findings public.

 Disclosure: Requires Nationally Recognized Statistical Ratings Organizations to disclose their methodologies, their use of third parties for due diligence efforts, and their ratings track record.

 Independent Information: Requires agencies to consider information in their ratings that comes to their attention from a source other than the organizations being rated if they find it credible.

 Conflicts of Interest: Prohibits compliance officers from working on ratings, methodologies, or sales.

 Liability: Investors could bring private rights of action against ratings agencies for a knowing or reckless failure to investigate or to obtain analysis from an independent source.

 Right to Deregister: Gives the SEC the authority to deregister an agency for providing bad ratings over time.

 Education: Requires ratings analysts to pass qualifying exams and have continuing education.

Why Change Is Needed: In this country, you are supposed to be rewarded for hard work.

 Vote on Executive Pay and Golden Parachutes: Gives shareholders a say on pay with the right to a non-binding vote on executive pay and golden parachutes linked to corporate takeovers. This gives shareholders a powerful opportunity to hold accountable executives of the companies they own, and a chance to disapprove where they see the kind of misguided incentive schemes that threatened individual companies and in turn the broader economy.

 Nominating Directors: Gives shareholders proxy access to nominate directors. Providing shareholders a greater role in choosing directors can help shift management’s focus from short-term profits to long-term growth and stability.

 Independent Compensation Committees: Standards for listing on an exchange will require that compensation committees include only independent directors and have authority to hire compensation consultants in order to strengthen their independence from the executives they are rewarding or punishing.

 Clawbacks for Executives at Public Companies: Requires that public companies set policies to take back executive compensation if it was based on inaccurate financial statements that don’t comply with accounting standards.

 SEC Review: Directs the SEC to clarify disclosures relating to compensation, including requiring companies to provide charts that compare their executive compensation with stock performance over a five-year period.

Why Change Is Needed: The Madoff scandal demonstrated just how desperately the SEC is in need of reform. The SEC has failed to perform aggressive oversight and is unable to understand the very companies it is supposed to regulate. And investors have been used and abused by the very people who are supposed to be providing them with financial advice.

 SEC Reforms: Mandates an annual assessment of the SEC’s internal supervisory controls and a biannual GAO study of SEC management.

 Uniform Standards for Advisors: Mandates uniform standards for anyone providing customers investment advice, eliminating different standards for broker‐dealers and investment advisers. Small investors should have uniform protections regardless of the title of the financial professional advising them has.

 Best Interest of the Client: Brokers who give investment advice will be held to the same fiduciary standard as investment advisers – they will be required to act in their clients’ best interest.

 Aiding and Abetting: Investors will be able to sue persons who help commit securities fraud.

 New Advocates for Investors: Creates the Investment Advisory Committee, a committee of investors to advise the SEC on its regulatory priorities and practices as well as the Office of Investor Advocate in the SEC, to identify areas where investors have significant problems dealing with the SEC and FINRA and provide them assistance.

 Funding: The self-funded SEC will no longer be subject to the annual appropriations process.

Why Change Is Needed: Companies made risky investments, such as selling mortgages to people they knew could not afford to pay them, and then packaged those investments together, called asset-backed securities, and sold them to investors who didn’t understand the risk they were taking. For the company that made, packaged and sold the loan, it wasn’t important if the loans were never repaid as long as they were able to sell the loan at a profit before problems started. This led to the subprime mortgage mess that helped to bring down the economy.

 Skin in the Game: Requires companies that sell products like mortgage-backed securities to retain at least 10% of the credit risk. That way if the investment doesn’t pan out, the company that made, packaged and sold the investment would lose out right along with the people they sold it to.

 Better Disclosure: Requires issuers disclose more information about the underlying assets and to analyze the quality of the underlying assets.

Why Change is Needed: Financial advisers to municipal securities issuers have been involved in "pay-to-play" scandals and have recommended unsuitable derivatives for small municipalities, among other inappropriate actions, and are not currently regulated.

 Registers Advisors and Brokers: Requires SEC registration for financial advisers, swap advisers, and investment brokers – unregulated intermediaries who play key roles in the municipal bond market.

 Regulates Advisors and Brokers: Subjects financial advisers, swap advisers, and investment brokers to rules issued by the Municipal Securities Rulemaking Board and enforced by the SEC or a designee.

 Puts Investors First on the MSRB Board: Gives investor and public representatives a majority on the MSRB to better protect investors in the municipal securities market where there has been less transparency than in corporate debt markets.

Why Change is Needed: The new proposals will create three new agencies – the Financial Institutions Regulatory Administration, the Agency for Financial Stability and the Consumer Financial Protection Agency – each posing staffing challenges that will determine the regulators’ success or failure.

A Better Work Environment to Attract Better Staff: The bill will set up a panel to look at the staffing needs of the three new agencies based on the successful panel that helped the IRS to improve their hiring practices. The advisory panel will last only three years to see that these agencies are able to attract, cultivate, and retain competent staff qualified to regulate complex, 21st century financial institutions.

From this morning's open (there have been many essentially-identical charts over the last months...)

You can argue anything you'd like, but this - the chart of the SPX cash and the dollar, overlaid - put the lie to any claim that "there is no carry" at play.

Today, as with many days before (and I'm sure will be since) is stunning evidence that indeed there is a monstrous carry being perpetrated against the dollar and our nation, Bernanke knows it, and there is exactly one way to stop it.

Remove enough liquidity so as to cause short rates to rise where it becomes unprofitable - 2% should do it.

Bernanke is causing this trade to be intentionally put on, and the only people profiting from it are the big banks that can borrow at or near the fed funds rate. 

You and I are forced to borrow (if we want to, which we'd be nuts to do) at 29.9% on our credit cards.

This is just another means by which the big banking oligarchs steal your money America.

There is no actual "rally" in the stock market as a consequence of fundamental improvement in the economy.  Rather, the "rally" is a consequence of the dollar carry trade - a destructive Godzilla that has infested our capital markets as a direct and proximate result of Bernanke's and Geithner's policies.

You have to love the mendacity of this clown:

“We have been very fortunate that the stock markets moved back” and are “re-liquifying the whole process,” Greenspan said at an event in Edmonton, Alberta, presented by Abu Dhabi National Energy Co., the state-controlled energy producer known as Taqa.

Oh please.

If I print up $12 trillion in direct funds and guarantees - not based on production but rather based on intentionally overpaying for "assets" (that have a true character and value closer to that of used dog food) and then tell the primary dealers that I transact with that they are "too big to fail" and that I want them to buy risky assets (implying or outright stating that if they're wrong they won't be held responsible for the losses) of course I can drive the stock market higher.

For a while.

But I don't think anyone expected it to do THIS:

I certainly didn't.

But heh, that's me.  I know, I know, The WSJ has their own data center claiming the P/E is "only" 69 and on "forward estimates" is 17.  But their computational format is not published and is from a third party (Birinyi Associates), while Standard and Poors actually runs the S&P index.  Who do you trust?  I choose a firm that has nothing to sell and designed the index itself.  You pick whoever you wish.

But left unsaid is how this "liquidity" gets into the broader economy.  Oh sure, for the banks that are trading with your money, and a "can't lose" proposition, they make a nice chunk.  Their employees get big bonuses, which they can then spend.

But this is a tiny fraction of the broader economy and population - not enough to matter.

Lending to ordinary people and businesses has not improved. 

Now let me be clear: We are in this mess because we lent too much money to people who couldn't pay.  That is, we "created" a false economic view, a false belief of sustainable economic activity (GDP) that in fact was simply compound pulling forward of demand.  We did this by extracting equity everywhere we could find it, and then when that wasn't enough we allowed negative equity to not only develop but be pressed further!  Indeed, the very premise of the "guidelines" published recently for FDIC bank examiners include allowing banks to count underwater commercial real estate loans as "perfectly fine" if they're cash-flowing - never mind the fact that the mortgage is for more than the property is worth, and thus if the cash-flow ceases for any reason (like, for instance, the tenants in the place going bankrupt or leaving for cheaper quarters!) the bank will suffer a huge capital loss.

But the idea that Greenscam is promoting - that "we're getting better on the back of asset appreciation in the stock market" - is nonsense.  As any trader or investor that lived through last year will tell you, gains are not real until you reduce them to cash - "paper profits" are in fact no profit at all.  Just ask those who had $1 million in their portfolios in October of 2007, yet even after the "huge rally" are still looking at a $700,000 balance!

Paper changes in balance sheets do not translate into spendable cash; at best they lead to another bubble just like home price "appreciation" did when people start borrowing against that so-called "value."  This in turn leads to another collapse when the "value" disappears, just as it did with housing.

"Margin call Gentlemen" is not something you wish to hear, but it appears to be what Greenscam wants to see happen to millions of Americans.

Don't fall for this blatantly senile BS.