KfW Dismisses Managers Responsible for Lehman Transfer

Too bad these herren did not work in the States for an American bank. They would have received huge bonuses and golden parachutes.

Reuters
KFW fires two board members over Lehman transfer
by Philipp Halstrick
Mon Sep 29, 2008 5:43am EDT

BERLIN, Sept 29 (Reuters) - German state lender KfW has fired two board members over the transfer of around 300 million euros to Lehman Brothers on the day the U.S. bank filed for bankruptcy, the finance and economy ministries said on Monday.

KfW's board of supervisory directors decided that Peter Fleischer and Detlef Leinberger would have to leave their posts with immediate effect, the ministries said in a statement. The two board members had already been suspended.

KfW has said it mistakenly transferred the funds to Lehman to unwind a swap agreement, in which two counterparties agree to exchange one stream of cashflow against another stream. (The "funds" were €319 million or about US$466 million - Jesse)

The case made front-page news in Germany, with one newspaper calling KfW "Germany's dumbest bank".

It also put pressure on Economy Minister Michael Glos, chairman of KfW's board of supervisory directors, and Finance Minister Peer Steinbrueck, who is deputy chairman. (Der Scheisse rolls downhill also in Germany - Jesse)

The ministries said the board backed management plans to examine KfW's risk management and business processes thoroughly.

"The supervisory board reiterates that Germany needs a strong development bank and thus supports the KfW board and all staff in the aim of steering KfW back into calmer waters as soon as possible so it can focus on core duties again," they said.

Sources have said the German lender's total exposure to Lehman was 536 million euros, including the Lehman transfer.

KfW had already taken a hit from liquidity lines given to business lender IKB the country's biggest casualty of the subprime crisis.

The Mother Bubble

The US Long Bond.

Or as the New York bondtraders used to say, "Big Daddy."

A picture or two are worth a thousand words.

It can go on indefinitely right?

Don't most man-made things continue on endlessly in this world even when they stop making sense?

Special thanks to Brian at ContraryInvestor.com

Primary bagholders. We'd like to think the Brits are acting as agents for others.

FDIC to Have Access to "Unlimited Amounts" from Treasury - Vote Set for 7:30 PM

The Weather Report says rough seas ahead, mates.

Wall Street Journal
OCTOBER 2, 2008
Revised Bill Lets FDIC Borrow Without Limits

The Senate financial market rescue bill would temporarily allow the Federal Deposit Insurance Corp. to borrow unlimited amounts of money from the Treasury Department in connection with the larger government deposit coverage that would extend until the end of next year.

This is important because it would increase the backstop that the FDIC has to make sure that insured depositors can be repaid if their bank fails.

U.S. President George W. Bush will speak with lawmakers to bolster backing for the Senate's $700 billion market-rescue bill. The vote most likely will come after 7:30 p.m. EDT, according to an aide in Senate Majority Leader Harry Reid's office. The vote is being held after sunset in observance of the Jewish holiday Rosh Hashanah.

The vote most likely will come after 7:30 p.m. EDT, according to an aide in Senate Majority Leader Harry Reid's office...Senate lawmakers decided to take off the cap completely, authorizing the FDIC to request from the Treasury "a loan or loans in an amount or amounts necessary… without regard to limitations."

ISM Manufacturing Index Plunges - Government Remains Clueless - Economists Bewildered

The real economy is falling apart, but the panglossian pundits won't EVEN say the recession word yet.

Yes, politicians lie, but that is supposed to be a cynical observation, not a performance objective.

Things were just fine last week, if we don't give the largest non-military grant in history to the banks tomorrow at the latest, no questions asked or terms discussed, we will immediately plunge into the Great Depression. But we've been jerked around about the Alternative Minimum Tax adjustment, Social Security, Campaign Reform, and Predatory Lending and Usury for the last eight years.

And politicians and pundits wonder why the public is angry? Most people are just busy, not completely stupid.

Let's make a deal. Stop lying so much and so often, stop taking money and soft bribes, and do your job. Then we might start to believe you again.

If our system is all about confidence then this government is in trouble and needs to be replaced with people who are not moral mutants. Hey, next month is November. How convenient.

As a former legislator and government official is said to have observed:

You can fool some of the people all of the time,
and all of the people some of the time,
but you can not fool all of the people all of the time.

U.S. Sept. ISM manufacturing index plunges to 43.5%
By Greg Robb
10:06 a.m. EDT Oct. 1, 2008

WASHINGTON (MarketWatch) - The nation's manufacturers cut back production at a much faster pace than expected in September, the Institute for Supply Management reported Wednesday. This is the lowest level since October 2001. The ISM index plunged to 43.5% in September from 49.9% in August.

This is the biggest drop in the index since 1984. The drop surprised economists. (The law of gravity surprises some economists on a nearly daily basis if it suits their hypothesis. - Jesse)

The consensus forecast of estimates collected by Marketwatch was for the index to slip only a bit to 49.6%. Readings below 50 indicate contraction. The ISM index has been holding near 50 since the summer. The previous low this year was 48.3 in February.

Economists said the ISM index was near recessionary levels. (We are in a recession and have been for some time. Government fiddling with statistics can only mask the reality of our troubles for the short term. And economists appear to be aspiring to displace lawyers from the top of the most despised profession list. - Jesse)