One World Market, baby / The Private Global Equity Order

[Joe Hillshoist]

Awesome thread gouda. Just found it. Thanks.

[Hammer of Los]

Yes, great posts Gouda, I just wish I understood more.

This does rather stand out to us Alex Jones reading paranoid maniacs who wonder whether the financial crisis has been engineered by the global government types, to bring about some sort of worldwide consolidation of financial systems and monetary policies under a single umbrella;

Financial firms face a "NEW WORLD ORDER" (my emphasis) after a weekend fire sale of Bear Stearns and the Federal Reserve's first emergency weekend meeting since 1979, research firm CreditSights said in a report on Monday.

More industry consolidation and acquisitions may follow..

And from Reuters too, surprise, surprise.

[Gouda]

NY Fed chief urges global bank framework
http://www.ft.com/cms/s/0/546b1604-3585 ... 10621.html

By James Politi in Washington and Gillian Tett in London , Financial Times, 8 Jun 2008

Banks and investment banks whose health is crucial to the global financial system should operate under a unified regulatory framework with "appropriate requirements for capital and liquidity", according to Timothy Geithner, president of the Federal Reserve Bank of New York.

Writing in Monday's Financial Times, Mr Geithner, a key US policymaker throughout the credit crisis and one of the main architects of the rescue of Bear Stearns, says that the US Federal Reserve should play a "central role" in the new regulatory framework, working closely with supervisors in the US and round the world.

"At present the Fed has broad responsibility for financial stability not matched by direct authority and the consequences of the actions we have taken in this crisis make it more important that we close that gap," Mr Geithner says, in an excerpt of a speech to be delivered today at the Economic Club of New York.

The credit crisis has heightened pressure on US policymakers to consider sweeping changes to a regulatory system for financial institutions which has commercial banks such as JPMorgan Chase and Citigroup regulated by the Fed and investment banks such as Goldman Sachs and Lehman Brothers more loosely regulated by the Securities and Exchange Commission.

Mr Geithner called the system "a confusing mix of diffused accountability, regulatory competition and a complex web of rules that create perverse incentives and leave huge opportunities for arbitrage and evasion".
However, legislation to overhaul US financial regulation is unlikely to start advancing through Congress until next year when the new administration takes office.

In his speech, Mr Geithner will also say the Fed is examining whether to make "permanent" some of the new liquidity facilities put in place during the credit crisis, and called for central banks to establish a "standing network of currency swaps, collateral policies and account arrangements" to bolster liquidity during a future crisis.

Meanwhile, Malcolm Knight, the general manager of the Bank of International Settlements, the Basel-based central banking group, told the FT that the financial system now faces a growing risk of exchange-rate volatility as investors and central banks grapple with the impact of rising commodity prices and other inflationary pressures.

"It is not clear if the rest of the world is going to continue to fund the US current account deficit at current levels of exchange rates," he said. "The pattern of the exchange rates is subject to considerable uncertainty now."

The comments are likely to be closely watched by investors and policymakers, since they come at a time of renewed market focus on the outlook for the dollar relative to the euro and other currencies. Last week, Ben Bernanke, Fed chairman, broke with the US central bank's traditional silence on currency matters to make clear that it does not want any further dollar weakness.

While the dollar rallied on Mr Bernanke's remarks, it retreated later in the week after European Central bank comments suggested an interest rate rise and as the price of crude oil soared, heightening inflation fears.

"There is a perception that after a long period of quiescent inflation, things are changing," Mr Knight said. "This is quite visible in terms of commodity prices in energy markets but also in terms of what is happening with other commodities too."

***

on edit: fixed dead link

[Gouda]

More giddy talk of that "new financial world order" (see page 4 of this thread) ...


'Tectonic' Shift on Wall Street as Lehman Fails, Merrill Sold
http://www.bloomberg.com/apps/news?pid= ... refer=home

Sept. 15 (Bloomberg) -- In the biggest reshaping of the financial industry since the Great Depression, two of Wall Street's most storied firms, Merrill Lynch & Co. and Lehman Brothers Holdings Inc., headed toward extinction.

New York-based Lehman, founded 158 years ago, said early today that it plans to file for Chapter 11 bankruptcy protection after failing to find a buyer. Merrill Lynch, 94 years old and also based in New York, agreed to sell itself to Bank of America Corp. for $50 billion in an emergency deal hashed out yesterday.

``The tectonic plates beneath the world financial system are shifting, and there is going to be a new financial world order that will be born of this,'' said Peter Kenny, managing director at Knight Capital Group Inc., the Jersey City, New Jersey-based brokerage that handles about $1 trillion worth of stock transactions a quarter. ``It's an ugly and painful process.''

(...)

From Five to Two

The five New York-based securities firms that dominated Wall Street have been reduced to two: Goldman Sachs Group Inc. and Morgan Stanley. While both firms are scheduled to report a drop in third-quarter earnings this year, their business has remained profitable throughout 2008 -- unlike Lehman and Merrill.

``I think highly of Morgan Stanley and Goldman Sachs, so I expect them to ride this out,'' Evercore Partners Inc. Chief Executive Officer and Former Deputy Treasury Secretary Roger Altman said in an interview on CNBC.

(...)

[Gouda]

"Goldman running the bailout(s)" [Gouda's headline]

http://www.bloomberg.com/apps/news?pid= ... refer=home

Sept. 29 (Bloomberg) -- As much as $37 billion from federal bailout loans to American International Group Inc. has gone to investment banks including Goldman Sachs Group Inc., the firm Treasury Secretary Henry Paulson used to run.

...

Paulson's successor at Goldman, Lloyd Blankfein, was the only chief executive at a meeting Sept. 15 at the New York Federal Reserve Bank at which the troubles at AIG were discussed,

...

Paulson last week hired former Goldman colleague Edward C. Forst to advise him on the government's $700 billion rescue plan. Forst left Goldman Sachs in June to become executive vice president at Harvard University.

...

The Fed appointed a member of Goldman's board, Edward Liddy, to run AIG, replacing Robert Willumstad.

[Gouda]

and then there were 3 massive US Banks (oh, plus the two new banks: Goldman Sachs and Morgan Stanley) ...

Citigroup to buy Wachovia banking operations
http://news.yahoo.com/s/ap/20080929/ap_ ... _citigroup

The deal greatly expands Citigroup's retail outlets and leaves it among the U.S. banking industry's Big Three along with Bank of America Corp. and J.P. Morgan Chase & Co.
...

Federal Reserve Chairman Ben Bernanke, in a statement Monday, said he supports the "timely actions" taken by the FDIC "which demonstrate our government's unwavering commitment to financial and economic stability."


Our Government indeed. -- Gouda

[Gouda]

While Wells Fargo wrestles Citigroup over the meaty, yet wormy, carcass of Wachovia,
Goldman Sachs 'alums' continue to monopolise public servic(ing) for the private good(s)...


Treasury names rescue program chief

http://www.reuters.com/article/topNews/ ... me=topNews

WASHINGTON (Reuters) - The Treasury on Monday named Assistant Secretary for International Economics and Development, Neel Kashkari,
as head of the $700 billion government program that will buy soured investments to help restore the financial markets to health.

Kashkari was named as the interim Assistant Secretary of the Treasury for Financial Stability -
a role envisioned in the rescue plan that was signed into law by President George W. Bush last week.

Kashkari is a veteran banker from Goldman Sachs and joined the Treasury
in July 2006 as a senior advisor to Treasury Secretary Henry Paulson.

[Gouda]

Bank Capos at the Treasury invite their Bank colleagues from the Last Banks Standing to a lil' coordination meeting of Family Heads,
while private firms specializing in mergers and private equity, like Simpson Thatcher & Bartlett LLP, are being brought in...
privatization, consolidation and allocation continue...


US [Bankers] summon[s] bankers...

http://ap.google.com/article/ALeqM5ioHc ... QD93PQO500

Oct. 14, 2008
By MARTIN CRUTSINGER

WASHINGTON (AP) — (...)

The Bush administration summoned executives from leading banks to a meeting in Washington Monday afternoon to work out details of the $700 billion plan aimed at thawing the credit markets — the economy's lifeblood ["lifeblood" is it? -- Gouda].

(...)

Treasury Department spokeswoman Brookly McLaughlin said officials from the Treasury Department and the Federal Reserve would participate in the meeting at the Treasury Department. The discussions are aimed at finalizing details on the rescue package Congress passed on Oct. 3. The package has quickly expanded from purchasing financial firms' bad debt to include the government taking partial ownership in banks, among other possible steps.

Over the weekend, Paulson called the heads of the five biggest U.S. banks to come to Washington for face-to-face talks about the rescue plan, according to people briefed on the matter. They were not authorized to speak publicly because of the sensitivity of the negotiations.

Goldman Sachs CEO Lloyd Blankfein, Morgan Stanley CEO John Mack, Citigroup CEO Vikram Pandit, JPMorgan Chase & Co. CEO Jamie Dimon, and Bank of America Corp. CEO Kenneth Lewis were all asked to attend.

There was some speculation that Paulson might have expanded the invitation to at least three other CEOs from various regional banks, the people said.

It was expected that whatever comes out of the meeting will be used to put the finishing touches on the plan, the people said.

The administration's interim bailout package chief, Neel Kashkari, said early Monday the government is moving quickly to implement the rescue program, including consulting with private law firms on how to buy stakes in banks to boost their cash reserves.

He spoke as The Bank of England, the European Central Bank and the Swiss National Bank jointly announced they would work together to provide unlimited short-term funds to make money available to ease the credit freeze. The Bank of Japan said it was considering a similar move.

(...)

The administration on Monday also announced the selection of a team of interim managers, picked an outside firm to help run the program and tapped Federal Reserve Chairman Ben Bernanke to head up the oversight board guarding against conflicts of interest.

Kashkari, the assistant Treasury secretary who is interim head of the program, said officials were developing the guidelines that will govern the purchase of bad assets and had consulted with six specialist law firms on how the government will take partial ownership of banks.

After those consultations, Kashkari said Treasury had chosen Simpson Thatcher & Bartlett LLP ** to move forward to help the government structure the stock purchase program.

"We are moving quickly — but methodically — and I am confident we are building the foundation for a strong, decisive and effective program," Kashkari said in a speech Monday to the Institute of International Bankers.

Kashkari announced that investment consultancy Ennis Knupp & Associates had been chosen as the private firm that will help Treasury review proposals from asset management companies. He said that 70 companies had made bids to become the master custodian firm and that a final selection of the winning firm would be announced by Tuesday.

He said more than 100 companies had submitted bids to become one of the five to 10 firms that will operate the program to buy and manage the bad assets from financial firms.

(...)


________________________________________

** Simpson Thatcher & Bartlett LLP

Simpson Thacher & Bartlett LLP is one of the oldest and most prestigious law firms in the United States...Simpson Thacher is renowned for its litigation and corporate practices, with special attention focused on its mergers and acquisitions specialty. The firm has particularly important relationships with private equity firms such as the Blackstone Group and Kohlberg Kravis Roberts.

[Gouda]

Moving right along...and just a week after the Bankers Summon the Bankers meeting (see above...)


U.S. Treasury to favor new bank mergers

http://www.iht.com/articles/2008/10/21/ ... 21plan.php

October 21, 2008

WASHINGTON: In a step that could accelerate a shakeout of U.S. banks, the Treasury Department hopes to spur a new round of mergers by steering some of the money in its $250 billion rescue package to banks that are willing to buy weaker rivals, according to government officials.

As the Treasury embarks on its unprecedented recapitalization, it is becoming clear that the government wants not only to stabilize the industry, but also to reshape it. Two senior officials said the selection criteria would include banks that need more capital to finance acquisitions.

"Treasury doesn't want to prop up weak banks," said an official who spoke on condition of anonymity, because of the sensitivity of the matter. "One purpose of this plan is to drive consolidation."

With bankers traumatized by the credit crisis and the loss of investor confidence, officials said, there are plenty of banks open to selling themselves. The hurdle is a lack of well-capitalized buyers.

Stable national players like Bank of America, JPMorgan Chase, and Wells Fargo are already digesting acquisitions. A second group of so-called super-regional banks are well positioned to take over their competitors, officials said, but have been reluctant to undertake or unable to complete deals.

...

The institutions, he said, must fill out a standardized two-page form and submit it to their primary regulator by Nov. 14. The Treasury will receive the applications, with a recommendation, from the regulator. Once it decides whether to inject capital, it will announce its investment within 48 hours. It will not disclose banks that withdraw or are turned down.

*****

The article failed to add that there is barely even the pretense that this is not in fact a harmony-of-interest rubber-stamp procedure for pre-determined favorites (see Treasury's invitee list to top secret meeting in previous post above). Two-page form. 48 hour reply. Nice and easy! Let me guess -- some of the winning banks will be: Goldman? JP Morgan? Morgan Stanley? Citigroup? Oh, and where is former Goldman man, John Thain, now? Yes: Bank of America. After he took the NYSE global and guided Merill Lynch into BOA's belly.

[Gouda]

U.S. Treasury Shuns Banks That Need Cash Most in Buying Spree

http://www.bloomberg.com/apps/news?pid= ... refer=home

Oct. 29 (Bloomberg) -- The U.S. government's $160 billion handout to banks from Niagara Falls to Beverly Hills is going mostly to lenders that need it least, putting weaker rivals at risk of being shut down or taken over, analysts say.

``This has the unintended effect of making the strong stronger and the weak weaker,'' said Gray Medlin, founder of Carson Medlin Co., a Raleigh, North Carolina, investment bank focused on banking deals. ``Banks that are getting bad exams and are under intense pressure from regulators won't be successful in applying.''

Yeah, "unintended."

[Gouda]

The Wall Street bailout looks a lot like Iraq — a "free-fraud zone" where private contractors cash in on the mess they helped create

Rolling Stone LINK

Wherein Naomi Klein dishes on the continuation of disaster capitalism as it is now being implemented at lightning speed by the privatized Treasury Inc., and touches on some players aforementioned in this thread, such as BONY Mellon Corp, selected as "master custodian" of the bailout; and Simpson Thatcher & Bartlett LLP, Wall Street's legal muscle behind previous mergers and acquisitions, selected to provide legal "services" to help the banks it represents in the private sector get public merger and acquisition cash.

Must read.

This sums it up:

Has the Treasury partially nationalized the private banks, as we have been told? Or is it the other way around? Is it Treasury that has been partially privatized by Wall Street, its massive rescue plan now entirely in the hands of a private bank it is directly subsidizing?

***

None of our business:

[Gouda]

Citigroup May Seek Merger as Stock Plunges Further

http://www.cnbc.com/id/27829103

By Charlie Gasparino, On-Air Editor | 20 Nov 2008 | 06:49 PM ET


Senior officials at Citigroup told CNBC that they will have to make a strategic change in the firm's direction, including finding a possible merger partner or raising cash in the coming days to arrest a sharp slide in the firm's stock price.

A Citigroup spokesman had no comment, but investment banking sources say possible partners could include Morgan Stanley, Goldman Sachs, or State Street Bank. Both Goldman and Morgan have recently switched over to banking holding companies so they could collect deposits. But finding a possible partner would be difficult in an environment where every major firm is reeling from the credit crunch and has its own set of problems.

(...)

Citi shares tumbled again despite news that Saudi Prince Alwaleed bin Talal plans to increase his stake in the company to 5 percent from less than 4 percent.

(...)

Citi Presses to Bring Back Short-Selling Ban

Citi has also approached members of Congress to discuss its concerns about short-selling, a source familiar with the matter told Reuters, speaking on condition of anonymity.

[Gouda]

What have the surviving behemoth banks been doing, in part, with their TARP US taxpayer loot?
Why, "globally significant market" investments in fact. China, Dubai, India. See rest of thread.

From a memo released today by Domestic Policy Subcommittee Chairman Dennis Kucinich:

[url=http://domesticpolicy.oversight.house.gov/documents/20090309135532.pdf]Kucinich Releases Memo Outlining Treasury’s Failure to Oversee Troubled Asset Relief Program -
Identifies Questionable Transactions, each Valued at more than $1 billion, by Major Banks[/url]

Questionable Transactions

. $ 8 Billion loan from Citigroup Inc. to Dubai public sector entities made on or about December 14, 2008. Win Bischoff, then-Chairman of Citi, said about the transaction, "'We continue to place the Gulf region among our globally most significant markets." Citi received $25 Billion of TARP funds on October 26, 2008.

. $ 1 Billion investment by J.P. Morgan Treasury Services in development of cash management and trade finance solutions in India made on or about November 11, 2008. J. P. Morgan Treasury Services is a wholly owned subsidiary of J. P. Morgan Chase & Co. J.P. Morgan Chase & Co. received $25 Billion in TARP funds on October 26, 2008.

. $ 7 Billion investment by Bank of America in China Construction Bank Corporation, after November 1712008. This purchase constitutes the exercise of an option acquired from China SAFE Investments Limited (Huijin). Bank of America received $25 Billion in TARP funds on October 26, 2008.

[Gouda]

Barclays May Hire Up to 65 Bankers for European Mergers and Acquisitions

May 25 (Bloomberg) -- Barclays Plc may hire as many as 65 bankers for its European mergers advisory business this year as Britain’s third-biggest bank seeks to become one of the top three global securities firms.

Barclays Capital, which previously focused on bonds, loans and foreign exchange, surged to fifth in U.S. takeovers after the acquisition of Lehman Brothers Holdings Inc.’s North American unit in September, according to data compiled by Bloomberg. The London-based firm ranks 21st in Europe, where Lehman’s operations were bought by Nomura Holdings Inc.

“We aim to be top three across all products and regions” in investment banking, said Parker, who is spending a significant part of his time in Europe, helping recruit bankers. Barclays Capital wants to be a leader in cross-border deals “by combining the firm’s global perspective with local expertise.”

Barclays Capital advised Pfizer Inc. on its $64 billion acquisition of Wyeth, the biggest takeover this year, and Verizon Communications Inc. on its $5.25 billion sale of phone lines to Frontier Communications Corp. It helped Dow Chemical Co. sell a stake in a Dutch oil-refining venture with Total SA to Valero Energy Corp. for $725 million.

(...)

Credit Suisse Group AG is No. 1 in European mergers, followed by Citigroup Inc., Deutsche Bank AG, Morgan Stanley and JPMorgan Chase & Co., Bloomberg data show. Goldman Sachs Group Inc. ranks seventh after Zurich-based UBS AG.

(...)

Jerry del Missier, president of Barclays Capital, said earlier this month that expanding in mergers advisory and stock underwriting in Europe and Asia was the “single-biggest initiative this year.” The firm aims to add about 300 people for European and Asian equities by the end of 2009.

Societe Generale SA, France’s third-largest bank, said last week it plans to hire about 35 bankers to build up its M&A advisory business.

[Gouda]

European Banks Growing Bigger ‘Sowing the Seeds’ of Next Crisis
http://www.bloomberg.com/apps/news?pid= ... ekc&pos=10

Dec. 2, 2009 (Bloomberg) -- European banks are emerging from the credit crisis bigger than before, posing more risk to their national economies.

BNP Paribas SA, Barclays Plc and Banco Santander SA are among at least 353 European lenders that have increased in size since the beginning of 2007, according to data compiled by Bloomberg. Fifteen European banks now have assets larger than their home economies, compared with 10 lenders three years ago.

While the European Union has grabbed headlines for breaking up bailed-out banks, regulators haven’t reined in firms that shunned state aid and are too big to fail. European bank assets have grown 25 percent since the start of 2007, compared with a 20 percent increase at U.S. lenders, Bloomberg data show.

“We are sowing the seeds for the next crisis,” said David Lascelles, senior fellow at the London-based Centre for the Study of Financial Innovation, a research group. “What we have been doing in the last two years is making banks much bigger. It really goes against the currents of the time.”

...

BNP Paribas

Paris-based BNP Paribas, the world’s biggest bank by assets, increased its balance sheet by 59 percent to 2.29 trillion euros ($3.5 trillion) since the beginning of 2007, an amount equal to 117 percent of France’s gross domestic product. Assets at London-based Barclays jumped 55 percent to 1.55 trillion pounds ($2.6 trillion), or 108 percent of U.K. GDP. Santander’s rose 30 percent to 1.08 trillion euros, about the size of Spain’s GDP.

...

Growing Complexity

The increasing complexity of banks makes it difficult for regulators and governments to monitor risks, even at firms that appear transparent and stable, said Johannes Wassenberg, managing director of European banking at Moody’s Investors Services in London.

...

‘Pathetic’ Oversight

In contrast to Santander, Barclays increased its reliance on investment banking after it bought Lehman’s North American unit and hired bankers in Europe and Asia to expand the business. Barclays may get half of its profit from investment banking by 2011, according to Alex Potter, a London-based analyst at Friedman Billings Ramsey.

Tony Lennon, president of the U.K.’s Broadcasting Entertainment Cinematograph & Theatre Union, is concerned that the drive for new international rules is slipping away as the recession comes to an end.

The financial crisis was like a nuclear reactor on the verge of exploding, Lennon said. Now that the danger of Armageddon has passed, banks and regulators are continuing as if nothing happened, he said in an interview on Nov. 16 at a Trades Union Congress conference in London on the U.K. economy.

“The reform so far has been pathetic,” Lennon said. “In the U.K., you had ATMs hours away from collapse. You need a complete overhaul of the system, and at the moment I can’t see it coming.”