THE DOT - if this turns orange or red be alert

Tuesday, June 16, 2009

Reality remains ugly against all the 'greenshoot' propaganda

The reason for TARP and the other multi trillion FED programs were bank lending or the credit crunch to ease. Reality is bank lending effectively shrank the bigger numbers claimed by some banks just come from relabeling existing credits like WAMU's at JPM which increased technically the amount by a few hundred billion but that were already existing credits.
68 bil. in TARP being repaid claimed as a positive event is again a bullshitting campaign as it is 10% of all TARP and the 180 bil paid to AIG is definitely lost hence the TARP operation is a huge loss as for now still counting. Same is true for the bond purchase programs of the FED at least 50 bil. are on the loss side for now as the bonds the FED bought have lost dramatically in value.
So far we can count together with the losses of Fannie and Freddie around 1 tril of losses for taxpayers so no reason to be cheerful for the morons in Obama admin and definitely no reason to give the FED more power as they have in corporate terms really screwed it and would be fired for such a disastrous performance. The real agenda though is that Summer's is preparing his next post as he plans to take over the FED when Bernanke's term ends soon and is therefor working to power up his next job as he is a member of the 'club' ( Rothschild - Illuminati) to increase their power.


Record Corporate Bond Sales Fail to Ease Cash Gap, Moody’s Says

By Caroline Hyde

June 16 (Bloomberg) -- As many as 14 percent of investment grade European companies will be unable to meet their cash requirements in the next 12 months even as bond issuance is at record levels, according to Moody’s Investors Service.

For high-risk, high-yield companies the situation is worse, with as many as 20 percent failing to have sufficient cash to meet outflows, the New York-based ratings firm said in a report today.

“Despite significant bond issuance volumes since the beginning of the year, liquidity remains fragile for corporate issuers,” said Jean-Michel Carayon, a corporate finance analyst at Moody’s in Paris.

European companies have sold more than 640 billion euros ($886 billion) of bonds this year to meet refinancing needs as the credit crisis forces banks to crimp lending. Borrowers have about $650 billion of debt maturing in the next 12 months and Moody’s said that “as the global financial crisis continues, the availability of reliable external funding continues to be a question mark.”

Almost half of sub-investment grade borrowers are in danger of breaching terms of their debt agreements, the report said, with 17 percent of investment grade companies at peril.

“Economic prospects are expected to remain weak at least for the remainder of 2009,” said Moody’s analyst Sabine Renner. “While a continuation of recent bond market activity helps mitigate -- at least to some extent -- liquidity pressures stemming from bank market stress and cash flow shortfalls, uncertainty will remain elevated.”

High-yield debt is graded below Baa3 by Moody’s and BBB- at Standard & Poor’s.

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