Europe in Prophecy

Total Economic Collapse*
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..."For in one hour so great riches is  come to nothing"
                                            -Book  of  Revelation  18 : 17
_______________________________________________________
...In  his  bestselling  1970's  "The Late Great  Planet  Earth"
Bro. Hal  Lindsey concludes that   the potential fall  of  the
US  dollar  would  forever  change  the balance of power  in
the  world  and  allow  the  rise  of  the  last   10  King
alliance  foretold  by  the  Biblical  Prophecies  and  there
can  be  NO  denying  that   the  present  economic  ills
plaguing  the  USA  are  of  grave  concern...
_______________________________________________________
...For  starters  just  this  month  alone  Florida, Louisiana
and  Texas  have  been  hit  by  Hurricanes  &  the insurance
losses  will  be  great, to  make  matters  worse  the  stock
market  appears to  be on the  brink of  major  "corrections"
company's  that   survived  the  great  depression  of  the
1930's  have   not  survived  this  present  financial  crisis
such  as  Lehman  Bros  for  example...
_______________________________________________________
...The  US  debt  is  multiplicating  as  never  before  &
with  the  financial  costs  of  the  war  in  Iraq  and
Afghanistan  many  economists   believe  that   the  US
economic  is  teethering  on  the  brink  of  collapse... 
_______________________________________________________
...Most  students of Bible Prophecy  agree  that  the European
Union  and  its  currency the  $ EURO will become  the  future
DOMINATING  global economic force  in  the  future  and
such  an  economy  will  transform into  the   future  666
financial  system...
______________________________________________________
...Don't  get  me  wrong the  end is not  yet  but  we  are
without  a  doubt just  around  the  corner  from  the
commencement  of  the  great  Tribulation..."WHEN"  the
US  Dollar  fails  this  will  affect  "ALL"  of  the  global
economies  so  no  nation,  not  even  the  enemies
of  America  should  be  delighted  for  even  their
small  economies  will  be  greatly   affected  by  all
the  financial  turmoil...

In one hour the 100+ year old giant

of  Lehman  Bros forever  Falls..."

September 16, 2008

SLAM. Slam. Slam. Slam. Like a scene from a gathering of Mafia dons, the doors of 30 black Lincolns slammed shut as their besuited occupants stepped out into a Manhattan downpour – and into a global financial storm.

That storm broke yesterday, with stock markets tumbling around the world. In London, the FTSE 100 plunged almost 4 per cent to 5204.2. Scotland's banking giants were among the biggest victims. HBOS slumped 17.5 per cent; Royal Bank of Scotland lost 12.2 per cent. In the US, the Dow Jones industrial average suffered its biggest fall since 9/11.

The collapse effectively began at 6pm last Friday. The place: the offices of the New York Federal Reserve. The occasion: an emergency meeting of the most powerful figures in American banking and finance aimed at staving off a massive bank collapse.

Those who stepped from their limousines to be present included Richard Fuld, the chairman and chief executive of Lehman Brothers; John Mack, the head of Morgan Stanley; Jamie Dimon, of JP Morgan Chase; Vikram Pandit, of Citigroup; Lloyd Blankfein, of Goldman Sachs; Bob Diamond, the head of Barclays Capital; and senior representatives from Mellon Bank and Royal Bank of Scotland.

"We are the biggest overseas bank in America", explained an RBS spokeswoman. "There was an 'all points bulletin' from the Fed and they called us in".

Awaiting them along one side of the boardroom table was the United States Federal Reserve chairman, Ben Bernanke – nicknamed Helicopter Ben for having slashed interest rates and showered Wall Street with money earlier this year to avoid the very disaster that was about to unfold.

Flanking him was Hank Paulson, the US treasury secretary, and Tom Geithner, chairman of the New York Fed. It was Geithner who opened the meeting – and presented Wall Street's finest with the fright of their lives.

Either there was a Wall Street rescue for Lehman, or the investment bank would have to face the consequences. An eerie silence ensued.

An analyst at RBS Greenwich in New York summed up the most dramatic meeting of America's top bankers thus: "I thought last weekend was crazy, but this one was even more chaotic.

"Everyone expected to hear by early Sunday evening that the Fed/Treasury had managed to arrange a shotgun wedding for Lehman with someone – Bank of America, Barclays, private equity. A funny thing happened on the way to a deal.

"The New York Fed called in all of the head honchos and said that they had a great deal for them. One lucky participant would get to buy Lehman's business and their 'good' assets for a bargain price.

"The others would get a consolation prize: a chance to contribute their own precious capital to fund a bank of Lehman's 'bad' assets. The Fed and Treasury were said to be 'adamant' that public money would not be involved in any bail-out.

"No government money? OK, no deal."

The meeting set the tone for the weekend. By Saturday morning, more than 100 bankers were involved. Paulson refused to budge on pleas for government underpinning of the Lehman "bad bank" proposal: $41.8 billion (£23.3 billion) of property and up to a further $40 billion of "toxic" assets that had been infected by subprime mortgage loans or derivatives.

Cookies and coffee arrived. Then ghoulish crowds began to gather, reminiscent of those that had assembled in Wall Street 80 years ago as the stock market crashed.

The last of the meetings broke up late on Sunday, by which time there were no fewer than three separate frenzied huddles of investment bankers. One comprised credit traders trying to agree an orderly unwinding of Lehman's default swaps to avoid utter mayhem yesterday morning.

Another room was full of regulators trying to put a floor under AIG, the world's biggest insurer, whose shares had crashed the previous week.

The third was putting together a massive $50 billion rescue takeover by Bank of America of Merrill Lynch – the investment bank to broking giant that is famous for its "raging bull" logo.

The United States is now in the throes of its biggest banking crisis in 70 years, stirring terrible memories of panics, bank failures, bankruptcies and mass unemployment. First Bear Stearns had to be rescued. Then the government had to take over Fannie Mae and Freddie Mac, the two largest US mortgage providers. Now Lehman Brothers.

Dick Fuld, who threatened to break the legs of any partner caught shorting Lehman stock – gambling on the value of shares falling – is now just another name on a lengthening list of the "Masters of the Universe", a phrase made famous by Tom Wolfe in his 1987 novel of Wall Street ambition and greed, The Bonfire of the Vanities, who have crashed to earth.

AND as Fuld crashed, his personal shareholding in the bank tumbled by more than $500 million. The list of the investment banking world's fallen giants already reads like a Who's Who of money: Charles "Chuck" Prince, the chief executive of Citigroup; Jimmy Cayne, the chief executive of Bear Stearns (RIP); Peter Wuffli, the UBS chief executive, and Marc Ospel, its chairman.

How has it come to this? What caused America's fourth-largest investment bank to crash and file for Chapter 11 bankruptcy? It is unctuously described by some as a "venerable, 158 year-old" institution. In truth, there is nothing particularly venerable about Lehman Brothers – and its elevation to "greatness" is recent.

It began in 1844 as a small shop in Montgomery, Alabama. It developed as an investment company, had a rocky ride in the 1970s, and in the early 1980s was bought by American Express, which sold it in 1993, when Fuld became chief executive.

Lehman floated on the stock market as a minnow boutique bank, with earnings of only $75 million.

But Fuld, a Lehman lifer, was already getting used to life in the "bulge bracket" (a group of investment banks considered the world's most powerful).

Before he took up the top post at Lehman, he found himself in a Las Vegas casino when a bad gambler blew $4 million. The gambler was following a classic strategy: when the cards go against you, double up the bet, because eventually things are sure to turn your way. Fuld took notes on a cocktail napkin as the gambler imploded, reaching the conclusion that bad luck can always continue longer than seems reasonable. "I don't care who you are," he wrote later. "You don't have enough capital."

How prophetic that was to prove.

From 2004, Fuld's fortunes were transformed as Lehman's profits surged. The bank rode what an earlier generation would have seen as a convergence of utter improbables: a wave of deregulation, typified by the scrapping of the Glass-Steagall Act (which kept retail and investment banks separate); low interest rates; and a wave of financial innovation that turned the most toxic loans into fancy credit products.

Sky-high bonuses and share-option packages poured fuel on this fiery concoction.

Lehman embarked on massively leveraged property acquisitions and expansion. Equity trading soared. And the bank plunged heavily into subprime lending. Indeed, just ahead of the market collapse, Lehman underwrote more mortgage-backed securities than any other firm.

IT built up a staggering $88 billion portfolio, 44 per cent more than Morgan Stanley and four times the $22.5 billion of shareholder equity the bank had as a buffer against losses.

But losses? What were they? Mortgage lending had a low default record. And the bank was on a roll, creating ever more ingenious financial products that bonus-driven salesmen sold to bedazzled clients. The group posted record profits, the shares soared towards $70 and bonuses and stock options gushed forth.

Fuld joined the bulge bracket. He was paid $34.5 million in 2005, comprising a base salary of $750,000, a $13.8 million cash bonus, and stock and options worth $19.94 million.

So how does his demise compare with the other fallen idols who have now fled the crashing debris in Wall Street? They may have driven their banks – and their shareholders – into enormous losses. But the former Masters of the Universe will never know what it's like to live in a subprime home.

By the end, 62-year-old Fuld was Lehman's biggest individual stockholder. Despite the crash, he stands to leave with about $65 million, based on Lehman's Friday morning stock price of $3.73. This tally includes 8.6 million unrestricted shares worth some $32.1 million as of Friday morning – though they had been worth $582 million last November before the credit crunch hurricane struck.

Chuck ("I'm still dancing") Prince left Citigroup with a package said to be worth $40 million. He also received a pension of $1.74 million and another one million stock options – worthless at the time of his departure. Merrill Lynch's Stan O'Neal spent much of last summer perfecting his golf swing, confident that his trusty lieutenants at Merrill could avoid those subprime bunkers. It turned out to be a bad call.

HE WAS ousted last October as the first waves of the credit crunch struck, with a retirement package reckoned at more than $160 million.

Jimmy Cayne, 15 years at the top of Bear Stearns, was said to be on the golf course in June 2006 just as the bank dropped the first of many clangers, with a 10 per cent dive in profits. Worse followed, with the bank having to put up $3.2 billion to try to rescue its imploding hedge fund.

By mid-March last year, when the bank collapsed, Cayne, who would rush from Wall Street by chopper to the private Hollywood Golf Club in New Jersey to play 18 holes before dark, had already relinquished the reins, handing over the chief executive's role to Alan Schwartz.

When Schwartz went cap in hand to the New York Fed for a $30 billion bail-out, Cayne was said to be competing in the North American Bridge Championship in Detroit.

Cayne and his wife, Patricia, sold all their 5.6 million shares in Bear Stearns – worth as much as $1.2 billion in January 2007 – for $61.3 million at the end of March this year. The couple recently bought two adjacent apartments in New York's plush Plaza building for $28.2 million.

He left with a $30 million "golden goodbye" – enough to do up his Park Avenue property and a mock Tudor mansion in Greenwich, Connecticut. But it emerged that the mansion, set in 2.3 acres of land, was surplus to requirements. "It no longer meets his needs,'' said the local estate agent, trying to sell it for $6.15 million. He was forced to cut the asking price.

That's how tough it gets at the top in Wall Street.

Scots bank giants shudder as shockwaves cross Atlantic

SHARES in global businesses plunged and analysts warned of a prolonged recession yesterday after leading investment bank Lehman Brothers filed for bankruptcy.

The move prompted Merrill Lynch, another of the top four US investment houses, to agree a £28 billion takeover bid from the Bank of America.

And it came after insurer American International Group approached the Federal Reserve for £22 billion of short-term financing.

The misery spurred the Bank of England to pump an extra £5 billion into the markets to improve liquidity for frightened banks, and the Fed to accept stocks in exchange for cash loans for the first time.

And MPs on the Treasury select committee said the Bank of England should be given greater powers to call for failing banks to be nationalised in the wake of Northern Rock.

Analysts warned the "whole of the international financial system" was at risk and, if it recovered, would be ensnared by far tighter regulation than in the past.

The FTSE finished 4 per cent lower, the Dow Jones plunged by almost 4 per cent, or 500 points, and shares dropped across the board.

Edinburgh-based banking giants RBS and HBOS were among the worst-hit firms. HBOS reached a yearly low when its stocks almost halved in value at one point in trading. They later rallied to end with a 17.55 per cent drop.

Lehman, a 158-year-old company with about 25,000 staff worldwide, including about 5,000 in the UK, filed for Chapter 11 bankruptcy in the US, which puts its operations under the ward of the courts.

Its share price tumbled 90 per cent last week after it reported a £2.2 billion loss precipitated by a £3.9 billion "hit" from commercial property and subprime mortgage losses.

The collapse came after Barclays Bank pulled out of a buy-out deal, reportedly because the US government had refused to issue guarantees.

The government's refusal to get involved is seen by analysts as a turning point following the use of public money in high-profile bail-outs of failing organisations including Bear Sterns, Fannie Mae and Freddie Mac.

Ten of the world's biggest banks committed to establish a £39 billion borrowing facility to bolster global liquidity.

Vince Cable, the Liberal Democrat Treasury spokesman, said the situation was "very grave". He said there would be intervention to stop banks failing because the "whole of the international financial system" was at risk.

"I think the least we are going to have to learn from this is that the whole of the financial sector simply cannot return to where it was before. It is going to have to be much more tightly regulated in the public interest."

When the markets opened in the wake of the collapse, UK banks were worst hit.

However, Angela Knight, chief executive of the British Bankers' Association, said "no UK bank was in a similar position to Lehman", which does not take retail deposits.

A spokesman for Gordon Brown, the Prime Minister, said the Treasury, Bank of England and Financial Services Authority were in "very close contact" with their US counterparts.

The funds released by the Bank were almost five times oversubscribed by banks. The European Central Bank also made undisclosed funds available to financial institutions. But the Fed refused to step in with direct assistance.

Professor William Perraudin, of Imperial College Business School in London, said banks would again become suspicious of lending to each other, leading to another plunge in the already fragile property market.

In the UK, administrators PWC said Lehman Brothers, the principal UK trading company in the Lehman group, was one of four firms in administration.

Refugees of financial storm flee with golf clubs and fine wines

CLUTCHING golf clubs, branded umbrellas and what appeared to be a box of fine Languedoc wines among other office knick-knacks, bewildered ex-employees yesterday streamed out of the Lehman Brothers' European headquarters at Canary Wharf in London.

Of the collapsed US investment bank's 4,500 UK-based staff, about 24 were made redundant immediately, with the majority due to find out where they stand today or tomorrow.

Staff were sent e-mails telling them the bank was filing for bankruptcy and to report for work at 7am.

Watched by a row of security guards, those who turned up were handed a printed sheet warning them not to engage in any financial transactions.

Tony Lomas, a lead administrator for PricewaterhouseCoopers, which took over the financial firm after it filed for bankruptcy protection yesterday morning, said the "extraordinarily complex" company could take six years to wind up and he was uncertain whether they would be able to pay the £42 million monthly wage bill this Friday.

After staff were given the choice simply to go home yesterday, some of them cried. Others were on the phone to headhunters and recruitment agencies. Elsewhere in the building, employees tried to use up credit on their canteen cards and others consoled themselves with a drink in the company canteen. Many spent the morning clearing their desks and swapping contact details.

Edouard d'Archimbaud, 24, from Paris, arrived in Canary Wharf for his first day of work but did not even make it as far as his desk. Mr d'Archimbaud, who was due to start a £45,000-a-year job as a trader, said he was told on arrival that everybody had lost their jobs. He said: " I've taken out a six-month lease on a flat and I don't know how I will pay for it."

Graduate trainee Jack Reynolds, with the company for only a week, said: "My career has been halted at the first hurdle."

Kirsty McCluskey, 32, who worked on the trading floor, said: "It is terrible. Death. It's like a massive earthquake. It's final. Everybody is just finishing up."

One banker, who is expecting twins, was among the staff laid off. Marion Guilbert, 36, said: "I have been there for seven years. It's even more emotional for a pregnant woman, but you have to take the positives out of it."

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