NightBlogger

Source: Mr. Mortgage
Condensed by Mr. Mortgage from an interview (See Video) conducted yesterday on CNBC by Maria Bartoromo with Meridith Whitney.

Meridith Whitney:

At a minimum, this is traumatic for everyone involved. Never in my wildest dreams would I have thought the landscape would exclude Lehman, Bear and Merrill.

What this does is exacerbates the credit crunch. Pulls so much liquidity out of the market.

Reality is this situation makes it worse. BofA Merrill is good.

Loss of Lehman pulls liquidity out of market

None of the $500b in previous write downs was done amidst liquidity pressure.

Near term Lehman and AIG will be selling assets. When there is a liquidity crunch asset prices will go lower.

Lehman’s forced selling of $600bb in assets very quickly will drive asset prices down very quickly causing pain across Wall Street

Other institutions will have to mark their assets lower. A real virus will spread; I don’t know how we get out of this short of real government intervention.

Maria: “What’s next?”

Underlying root of all evil has been us house prices.

Where have you (each bank) gone into this with assumptions of where housing prices will go?
Futures indicate a 33% peak to trough housing price decline…I think well north of 40-45%.

WB estimates a peak to trough house price decline of 21% with 60% exposure in CA where prices have been hit the hardest.

CITI assumes a 23% peak to trough house price decline. That math is not going to work.

The banks will have to play catch up with their write downs due to underestimating house price declines.

WaMu should be on forefront of everyone’s mind.

Maria asks about dividends:

It never made any sense why CITI kept their dividend. They should not pay one. They don’t earn any money. They can’t afford to pay. They will be selling assets. They have alot of stuff to sell like AIG.

Everyone is under asset value pressure and should not pay a dividend.

All these (financials) names will be bought at much cheaper levels in the short term.

I can’t believe equities market has held up so well as bond market credit spreads blown out across board.

So much destruction because of Lehman…very messy credit market next several weeks.

Don’t understand why equities market hanging in there so well

Europe and Asia:

When one of your major investment banks does not answer the phone it’s traumatic across globe. Lehman going down pulls liquidity out of the economy across the globe. To date $3 trillion less liquidity is flowing through the market than last year across the globe and $2 trillion less in the US markets.

How does engine go forward without any lubrication?

In the past the market did not impact the economy. But now, market directly impacts the economy and exacerbated certainly by this weekend and what I expect over the next couple of weeks. Now you will see economy impact the market going forward.

So much of the losses so far have been because on given loans prices have declined so much. There has been a small number of relative portion of given loans defaulted so far. Going forward, there will be a higher frequency of defaults in all states. Unemployment went up 50% from July 2007 to July 2008. The market has yet to appreciate how the economy is going to impact the market. The market is still reigning havoc on the economy.

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Source: Russia Today
Russia will not be isolated because it protected its citizens and upheld its peacekeeping mission, the Russian Prime Minister Vladimir Putin has said. In an interview on German TV, Putin suggested that if Russia had not responded to Georgian aggression, there could have been a tragedy along the scale of what happened in the former Yugoslavia. “I think a country like Russia, that protected its citizens, and fulfilled its peacekeeping duties, won’t be held in isolation, no matter what our partners think within the limits of their bloc. Europe and the U.S. are not the whole world,” he said.

He recalled the Srebrenica massacre, when thousands were killed when Dutch peacekeepers didn’t intervene in the Balkan war. The Prime Minister insisted that the Georgian government should be held responsible for its action. “Speaking about the Georgian leadership, people who wreck the territorial integrity and national identity of their country with their actions shouldn’t be ruling that country, be it big or small. They should resign straight away,” he said.

”Of course, it’s up to them, but we all remember the precedents that we have in history. Let’s remember how U.S. troops entered Iraq, and what they did with Saddam Hussein for destroying several Shiite villages. Here, ten Ossetian villages were destroyed right out,” Putin told ARD TV.

“Aren’t you aware of what’s been going on in Georgia in the last few years? The mysterious death of Prime Mnister Zhvania, fighting with the opposition, the violent dispersal of protest demonstrations, holding a national election during a practical state of emergency, and now this criminal action in South Ossetia with many casualties. You call it a democratic country, negotiating with it, and thinking it should be admitted to NATO and the EU?” Putin said the Georgian-South Ossetian conflict should be dealt within the frame of international law.

“We don’t have any special rules of our own by which we are going to play. We want everybody to play by the same rules. These are called international law. But we don’t want anyone manipulating them - playing it one way in one region, and another way in another region, to suit their own interests. We want to have the same rules for everyone, which would take into account the interests of all members of the international community”. Putin underlined that Russia wants neighbourly relations with other countries. “Russia isn’t out to aggravate the situation, or to put pressure on anyone. We want good neighbourly relations and partnerships with everyone,” he said.

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zdnet.com
It’s official, even a pothead can social engineer Network Solutions. In an in-depth interview with the hijackers, featuring some screenshots showing they had access to the complete portfolio of over 200 domain names controlled by Comcast, the details of how they did it, and why they did it are now coming straight from the source of the attack:

The hackers say the attack began Tuesday, when the pair used a combination of social engineering and a technical hack to get into Comcast’s domain management console at Network Solutions. They declined to detail their technique, but said it relied on a flaw at the Virginia-based domain registrar. Network Solutions spokeswoman Susan Wade disputes the hackers’ account. “We now know that it was nothing on our end,” she says. “There was no breach in our system or social engineering situation on our end.”

However they got in, the intrusion gave the pair control of over 200 domain names owned by Comcast. They changed the contact information for one of them, Comcast.net, to Defiant’s e-mail address; for the street address, they used the “Dildo Room” at “69 Dick Tard Lane.” Comcast, they said, noticed the administrative transfer and wrested back control, forcing the hackers to repeat the exploit to regain ownership of the domain. Then, they say, they contacted Comcast’s original technical contact at his home number to tell him what they’d done.

More

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Susie Bright, writer, audio-show host, interviewed Deborah Palfrey for 10 Zen Monkeys in late August 2007. “…[Deborah Palfrey] complains that she’d run her service for 13 years without so much as a peep of trouble from the police until [October 2006]…. And then all hell broke loose — just four weeks before the crucial 2006 elections. Under pressure, and suspicious about the timing of her bust, Palfrey eventually decided to go nuclear. She published the phone list of everybody who’d used her services.”

Deborah Palfrey:

For 31 months I was being observed! Any good vice cop will tell you that a simple prostitution bust or investigation takes no more than a few days to a few weeks to a few months to put together — from start to finish. It doesn’t appear that I was being looked at for prostitution-related activities, as much as I was being watched for my own personal and professional actions. My banking, my business affairs, my personal acts. So as for the question: why me and me alone? I think it’s logical to conclude that there was something that I had, or knew, that they found to be very valuable.

Who are they? We don’t know. Is it the GOP? Is it this administration? Is it Homeland Security? Is it the CIA? Who is “they”? We don’t know who they are…

When we were quiet as church mice — from last October 4, when the search warrant was executed, until March 1, when I was criminally indicted — we went to them on three occasions. We went to them in late October/early November, again in mid-January after New Year’s, and then finally at the last pre-indictment conference in late February. And we did everything — beg, plead, threaten, and cajoled the Assistant US Attorneys in this case. We asked them, “What is it that you want? What is going on here?” But they would not talk to us! They stood us up for an appointment. They did the most rudimentary motions work that they had to do… They wouldn’t hand over discovery! They stonewalled, stonewalled, stonewalled. And they were able to do so procedurally in the civil phase of this. We got nowhere.

At the very end, at this last pre-indictment conference in late February, we took the now famous photocopy of one page of that August, 1996 phone bill. And we said, “Look. We’ve got 46 pounds of this.

…October was one month before the very crucial November election of last year, when both the Senate and House went Democratic, and the balance of power in this country shifted. And, here I was, after 13 years, this very routine life… They must’ve watched me and thought I was the most boring person in the world. And all of the sudden, I start making these rather unusual or aberrant moves. I put my house of 15 or so years on the market. I closed my business rather unexpectedly — it wasn’t really unexpected, but if you’re watching me from afar, it would be a flag. My 13-year-business was shut down. And then I wire money — $70,000 — over to Germany, and make a little trip to Germany.

Which by the way was picked up on one of those Homeland Security terrorist watch programs — the ones which are supposed to be watching the terrorists?

They were watching me. Read more on this story.
Click here for more on Deborah Palfrey.

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