This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission. Legendary investor Warren Buffett is set to become one Goldman Sachs Group Inc.’s (NYSE: GS) largest investors without shelling out one penny. Impressive as that is, what’s even more striking is how the guru investor brokered the Goldman…
This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission. After a seven-day rally that produced consecutive record highs for the Dow Jones Industrial Average, the stock market today (Tuesday) took a breather. In early afternoon trading, the Dow Jones Industrial Average was down 16.66 or .12% at…
This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission. The Dow Jones Industrial Average set another fresh high when the stock market today (Friday) opened up, thanks to a stronger-than-expected jobs report. Right out of the gate, the Dow was up 80.93 points, or 0.56%, at 14,410.42.…
This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission. Warren Buffett‘s shareholder letter to Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) investors was full of the Oracle of Omaha’s market wisdom and one-liners, plus some hints about what Berkshire will pursue in 2013. Here’s a look at what…
This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission. Groupon CEO Andrew Mason was ousted by the company after a horrible earnings report and steep drive in stock price. The Groupon stock price tumbled 26% in after-hours trading Wednesday following the release of a dismal fourth-quarter earnings…
JPMorgan (NYSE:JPM) Reorders CIO Unit- JPM, WFC, C, KEY, STIU.S. Election NewsIn the newest argue of the huge trading loss, JPMorgan Chase & Co. (NYSE:JPM) has planned to remove the private equity-like operations the special investments group from …
Last Wednesday the conglomerate released its stock holdings. Mutual funds and retail investors closely watch the picks to dissect the selections for hints about the company’s tactics. Other simply want to mimic Buffett’s moves.
This quarter Berkshire disclosed new stakes in General Motors (NYSE: GM) and Viacom (Nasdaq: VIAB), larger positions in Wells Fargo (NYSE: WFC) and Wal-Mart Stores (NYSE: WMT), and a small increased position in International Business Machines (NYSE: IBM).
The Berkshire portfolio ballooned to $89.1 billion on March 31 from $77 billion at the end of 2011. The firm is the largest shareholder in Coca-Cola (NYSE: KO), Wells Fargo and American Express (NYSE: AXP).
The additions come as Buffett and Berkshire Vice Chairman Charlie Munger have tasked former hedge fund managers Todd Combs and Ted Weschler with more investing duties. The two were brought into Berkshire to help oversee investments, as Buffett, Berkshire’s CEO and chairman, transitions the company for his ultimate departure.
The 81-year-old sage acknowledged that he makes Berkshire’s larger bets, while his team of stock pickers is responsible for smaller wagers.
In his widely read shareholder letter in February, Buffett penned, “When our quarterly filings report relatively small holdings, these are not likely to be buys I made but rather holdings denoting purchases by Todd or Ted. They have the brains, judgments and character” to do the job.
In 2008, reckless credit default swaps nearly obliterated the global economy. Now comes the next crisis – rehypothecated assets.
It’s a complicated, fancy term in the global banking complex. Yet it’s one you need to know.
And if you understand it, you will get the scope of the risks we currently face – and it’s way bigger than just Greece.
So follow with me on this one. I guarantee that you’ll be outraged and amazed – and better educated. You’ll also be in a better position to protect your assets at the end of this article, where I’ll give you three important action steps to take. So follow along…
Their Profits on Your Money
Few people know this, but there’s a process through which banks and trading houses are leveraging your money to increase their profits – just like they did in the run-up to the last financial crisis. Only this time, things may be worse, as hard as that is to imagine.
Consider: In 2007 the International Monetary Fund (IMF) estimated that this form of “leverage” accounted for more than half of the total activity in the “shadow” banking system , which equates to a potential problem that would put this insidious little practice on the order of $5 trillion to $10 trillion range. And this is in addition to the bailouts and money printing that’s happened so far.
Wall Street would have you believe this figure has gone down in recent years as regulators and customers alike expressed outrage that their assets were being used in ways beyond regulation and completely off the balance sheet. But I have a hard time believing that.
Wall Street is addicted to leverage and, when given the opportunity to self-police, has rarely, if ever, taken actions that would threaten profits.
Further, what I am about to share with you is one of main the reasons why Europe is in such deep trouble and why our banking system will get hammered if the European Union (EU) goes down.
And w hat makes this so disgusting – take a deep breath – is that it’s our money that’s at stake. Regulators like the Securities and Exchange Commission (SEC) and their overseas equivalents are not only letting big banks get away with what I am about to describe, but have made it an integral part of the present banking system.
Worse, central bankers condone it.
As you might expect, the concept behind this malfeasance is complicated. But it’s key to understanding the financial crisis and to avoiding a possible global recession in 2012 and beyond.
What we’re talking about is something called “rehypothecation.”
Most people have never heard the term, but trust me, you will shortly. Let me explain what this is, and why you need to know about it. Then, I’ll offer three ideas to trade around it.
INGDirect, USAA, local credit unions, etc. happy to take disgruntled customers from BAC C JPM WFC.
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Did big banks leave TARP too soon?
By Jennifer Liberto
@CNNMoney September 30, 2011: 5:35 AM ET
Former FDIC Chair Sheila Bair pushed for the big banks to be held to tougher capital standards before they exited TARP.
WASHINGTON (CNNMoney) — Regulato…