IKN leaves its Fed commentary in the capable hands of Owly

BTW, if you actually want to read the Fed text, it's here.


This too

The Fed, the discount rate, the dollar and gold

So the Fed did this after the close today (excerpt)

In a statement Thursday, the Fed said it would raise its discount, or primary credit rate, to 0.75% from 0.5% effective on Friday. The central bank also said that, effective on March 18, the maximum maturity for discount window loans will be shortened to overnight.

Then the dollar did this....
.....but gold's reaction did catch my eye.

Gold first did the logical swandive, but then got bought back up. It's after-hours action so maybe the market is too thin to read with accuracy, but the action and then re-action in Au suggests that you shouldn't read too much into the Fed's move. After all, it was expected in March, so even though it's come maybe three weeks earlier than expected it's not a big shocker.

Whatever happens tomorrow, it is shaping up as an interesting day for the metals.

Update: Nice comment from Gary Biiwii. Also, gold futs dropped again...like i say...thin market and we'll get definition tomorrow. It's gonna be a fun day for sure but until then no more silly micromanagement

The Bank Stress Test Report Official Results and Link

I persnally don't care, neither does the dude who sent me the link (thanks 'R') But I know some of you do out there, so by way of public service here's the link to the official Federal Reserve Board PDF report on the bank stress tests, as published a couple of minutes ago.

enjoy

Straying out of territory for a moment........

...I have to say that this post from Paul Krugman absolutely nails the asininity of the US Treasury (combined with Fed). Krugman shoots down the latest plan in flames with the help of mega-respected econoblog Calculated Risk. Quite right, too. The Krugman post is the one mentioned here because it is short, accessible and right on the button. Go read, and while you're at it read this Krugman pearl from the weekend.

I'm not saying that Krugman has all the answers. I am saying that he knows economic bullshit when he sees it.

More evidence that Stanford International Bank is in a tight spot

Howzat?

Two stories from two sides of The World According To Allen Stanford point to the same conclusion; the dude has money issues.

Firstly, Nasdaq quoted Emageon (EMAG) was supposed to merge with Health Systems Solutions (HSSO.ob) with the (already extended) deadline being today. This is connected directly to Stanford International Bank (SIB) because it was the financial entity that had to come up with U$62m to fund the purchase. Unfortunately for all concerned, SIB has failed to deliver the cash, the dealine passed today and there's no word on reasons why as yet. Now that's strange when you consider that SIB claimed over a billion in liquid equity in its last client update at end December. Can't find $62m when you're supposed to have $1,000m lying around? Hmmmmmmmmmm. Here's how the news crossed the wires this morning:

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9:02AM Emageon provides update regarding merger transaction; has been informed that Stanford Intl Bank will likely not provide financing necessary (EMAG) 2.51 : Co announces that it has been informed by Health Systems Solutions (HSSO:OB) that it does not expect that Stanford International Bank will provide the funding necessary to consummate the parties' merger transaction today. The merger was scheduled to close today, Feb 11, 2009, in accordance with the terms of the parties' amended merger agreement. EMAG is evaluating its options in response to this development.

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And the result is that EMAG is today down 47%, the day's worst performing stock on the Nasdaq. The other story that points the "got cash?" finger at Allen Stanford is the imminent decision to drastically cut back his headline-making personal sponsorship of international cricket (his beloved and preferred pastime). The UK Daily Telegraph today reports that

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"Stanford and the England & Wales Cricket Board are keen to make an announcement on the match's future before the start of Friday's second Test in Antigua.

Giles Clarke, the chairman of the ECB, arrived in Antigua on Tuesday evening. Antigua is Stanford's home island and it is there that he closed his cricket office at the end of last year.

Stanford's company have also laid construction workers off on the island and with the credit crunch squeezing the financial markets, he looks set to trim down his lavish outlay on cricket yada yada continues here"

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All this at a time when his bank is reneging on deals and the SEC is renewing its scrutiny of SIB. Gotta make you wonder, hasn't it?

If I were one of the Latinos with part of the U$3Bn apparently held by people in SIB down here (there's over $7Bn in total deposits from 131 countries, apparently), I'd be thinking long and hard about what I really want to do with my life savings right now. Not only that, but if I were part of the Colombian Stock Exchange I'd be worried about suddenly losing the volumes created by the 4th biggest player in that market. Just thinking out loud, y'know.....personal opinion and all that......

UPDATE: Check out this no-beating-around-the-bush quote from the author of the excellent original analysis that set off interest in SIB these last few days. English language blog Caracas Gringo has interviewed Alex Dalmady and has him as saying the following:

“It took me less than 30 minutes to confirm that Stanford International Bank is a scam,” financial adviser Alex Dalmady tells Caracas Gringo. “All the data I needed was posted in plain view on Stanford’s web site,” he adds.

“I have only one question for Stanford’s owner,” Dalmady says. “Where is Stanford’s $8 billion portfolio? Where are the $8 billion hidden? Nowhere; they don’t exist.”

Related Posts

Alex Dalmady, blogger

Alex Dalmady guest blogs on IKN (February 14th)

As bad banks seem all the rage.....

Four more on Stanford International Bank

The Stanford Scandal: Alex Dalmady speaks

Stanford International: BusinessWeek and MSM getting busy now

Four more on Stanford International Bank

Anyone for cricket?

1) The story is getting traction. Felix Salmon over at his high traffic blog "Market Movers" has picked up on the story.

2) So far today this humble blog has had several visits from major newswires, three visits from the US Federal Reserve and one from the SEC, all using combos of "Alex Dalmady", "Stanford", "Madoff" etc as keyword entries*. Not to mention all those people from some island called Antigua and plenty from a company called "Stanford Eagle" in Houston. Hi guys, having a nice day?

3) The more I think about it, the better the original article written by Alex Dalmady that points to SIB bank looks. It's an excellently constructed note and deserves plenty of eyeballs. Here's the link again.

4) I can't help but be reminded of this post dated 25th October that quoted a large chunk of JK Galbraith work, The Great Depression. Here's part of the quote:

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At any given time, there exists an inventory of undiscovered embezzlement in, or more precisely not in, the country's businesses and banks. This inventory—perhaps it should be called the bezzle—varies in size with the business cycle. In good times, people are relaxed, trusting, and money is plentiful. And even though money is plentiful, there are always many people who need more. Under these circumstances, the rate of embezzlement grows. The rate of discovery falls off, and the bezzle increases sharply.

In Depression all this is reversed. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks."

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Related Post
Alex Dalmady, blogger
Alex Dalmady guest blogs on IKN (February 14th)
As bad banks seem all the rage......
More evidence that Stanford International Bank is in a tight spot
The Stanford Scandal: Alex Dalmady speaks
Stanford International: BusinessWeek and MSM getting busy now

* and by the way, the stats software cannot pick up on individuals, so rest easy. It can only tell me about companies or registered bodies such as gov't offices like the Fed. Big brother is not watching you.

Chart of the day is............

.....is Brazilian Real over the last three months.

Now that the Fed is pumping U$30Bn in their direction things might (repeat might) settle down a little, but after the recent switchback ride in the Real I wouldn't bank on it.

The funniest reaction to the Fed bailout (ok ok "credit swaps lines") of Mexico, S. Korea, Singapore and Brazil has been in Argentina. The Argentines have been all "Why not us? Aren't we important enough? Hey, that's not fair!" over it all. Absolutely ridiculous, and kind of ironic that the $30Bn offered up to Brazil by the Fed almost exactly matched the $29Bn that Klishtina gets her hands on by decimating her country's pensions sector, isn't it? Argentina no es un pais serio..........