Stock Market For Beginners Stock Market

Complex Financial Terms For DummiesAnd The Not So Dumb

America and the world at whole has been subjected to numerous financial jargon and sophisticated words for incredibly complex financial instruments, models, structures, and blah, blah, blah, blah.

Thankfully with the help of the Special Inspector General overseeing the use of TARP (Troubled Assets Relief Program) funds and a complete lack of trust for any government willing to give a few institutions they personally select billions of our tax dollars, so they can charge us interest on loans created by said tax dollars; I have worked on a complete list that should get you through reading the Wall Street Journal and understanding the not so complicated world of financial scamming.

I have combined all the not so easily understood terms used by these financial wizards so that everyday American voters can educate themselves and decided for themselves if the politicians supporting these TARP programs should actually be in office representing us.

The definitions are from the TARP Oversight Committee and it is available to read online, but sometimes definitions need explaining, so the Real Scoops are my definitions of the definitions.

ABS or Asset-Backed Securities: A tradable security backed by a pool of loans, leases, or any other cash-flow-producing assets.

THE REAL SCOOP: Whenever anything is explained by a term that needs explaining, you can bet its horse*bleep*. Let's first dissect what a tradable security is, Traders Log explains it as generally a transferable instrument representing an ownership interest in a corporation (equity security or stock) or the debt of a corporation, government or organization. So in reality it's basically some made up "product" that isn't really a product at all, it's just a piece of paper with a title and the supposed money behind this piece of paper is a pool of other pieces of paper. Unfortunately the consumers who they hoped they didn't financial bleed all the way, stopped making payments on their mortgages, home loans, credit loans, etc...due to insufficient wages and a poor job environment. So now the pieces of paper backing the other pieces of paper aren't worth the pieces of paper they are printed on - and that's when an ABS becomes toxic.

Troubled Assets: Includes mortgages, mortgage-related instruments, and any other financial instruments whose purchase or assistance in the form of government money is determined by Treasury in order to stabilize the financial markets, also known as Toxic Assets.

THE REAL SCOOP: Usually pools of ABS or side bets off of a group of other bets that are now toxic not because they are not worth anything, but they are just not worth what the banks and investors would like them to be worth right now. Treasury and their cronies on Wall Street and at the Federal Reserve can hand pick and buy up any financial institution they see as failing because of these under-performing troubled assets, and not let that institution take the free market course of bankruptcy and dissolve like all failed businesses do in a real free market.

Securitization: A process whereby a financial institution assembles pools of cash-flow-producing assets (such as loans) and then sells an interest in the cash flows as securities to investors.

The Real Scoop: Another part of the crap equation used by Wall Street to implode our economy. Basically a mortgage/bank company sells 100 loans to you and me, the American citizen. Another unrelated financial institution says to the mortgage/bank company we'll buy those 100 loans for the price of the loan plus 4% interest, mortgage company says okay and they've made a pretty heft profit and don't have the risk of those loans on their balance sheets and can offer another 100 loans and on and on. The financial institution is happy because they could never sell those loans themselves since they don't really have the assets to back them up if they fail, plus now the financial institutions receives monthly payments from the borrowers which is above the 4% interest they paid on the loans to the bank and packages the interest made on those payments as Securities to investors. So when the 100 loans made to people who probably can't afford them especially since the value of the mortgage is well above the value of the home the Securities begin to weaken and the investor eventually loses when the interest investment stream slows down or stops due to borrowers defaulting on their fraudulent loans. Financial Institution aren't as happy as they could be, but they still have the original loan sometimes referred to as a toxic asset, and they have the government to bail them out so they don't go bankrupt - the investor and the lied too borrower suffer, and you and I have no choice but to go bankrupt. Since the banks were creating mortgage loans like burgers at McDonalds, once the Securities stream got backed up the banks were still in full production on leeching the American public and got caught with a handful of bad loans and mortgages they could no longer off load to the financial institutions packaging them as Securities, and now the whole banking system is like one clogged up very toxic colon full of *bleep*!.

Subprime Borrowers: Refers to borrowers who do not qualify for prime interest rates because they exhibit one or more of the following characteristics: weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, or bankruptcies; low credit scores; high debt-burden ratios; or high loan-to-value ratios.

The Real Scoop: I love how the government, financial institutions and anyone associated with issuing bad loans is trying to turn the responsibility on us the citizens they supposedly serve; who are just seeking shelter a basic necessity. They love saying the borrower wasn't qualified, which is crap, being a subprime borrower is over 70% of the country due not to delinquencies and not paying on time, most of us do that. We live in a debt economy, where your debt to income ration is artificially kept high so you can never qualify for lower interest rates; it's not in the best interest of the financial institutions to do that. They keep you at the limit in order to maintain a high monthly payment from you over very long payout terms. Our credit scores are artificially kept low because we as a nation do not make enough, we average $37, 000 a year you'll never have a score above 750 making only $37, 000 a year - your debt to income ratio will not allow it, and throw in the fact that your mortgage is worth more than the property (asset), your loan-to asset value ratio will never allow you to qualify for prime rates.

Mortgage Holders: Lender or investor (depending on whether the mortgage is securitized) who owns the right to the borrower's monthly payments.

The Real Scoop: If you ever find yourself in mortgage trouble and end up at your wit's end and in court, ask them to "Produce the Note". Referring to your mortgage loan, they most likely won't be able to do it, because they have pooled your loan with many other loans numerous times and cut those pools into so many pieces that it is impossible to find one holder or any of the holders at this point.

Derivative Instruments: Investments that are valued by reference to the values of other investments. Examples include options and credit default swaps.

The Real Scoop: Another major contributor to the scam being pulled on the American public. These are investments based on other investments which means once again, banks are creating wealth from nothing, which is ridiculous. You had numerous corporation, banks, and individuals both domestic and foreign making side bets that you and I, the American Citizen, would fail to pay our mortgages. While making these bets they were artificially inflating the housing market and lobbying Congress to reduce regulation rules on who could qualify for a really big home loan - which led to a number of mortgage companies creating funny things like Interest Arms and other schemes being passed out like candy to anyone with any kind of job. So a lot of people, looking for shelter and a home to build a life out of (which is just human nature) bought into to scam and tried to make it work. In the mean time, these same folks who bet on us failing watched all the interest arms kick in and waited patiently for what they bet on too happen would happen. Unfortunately for all of us, when all these imaginary investments based on home mortgages crumbled with the housing bust, the banks had all these imaginary investments that were worth nothing and their real portfolio of mortgages and other loans weren't being paid back and the sky fell on a number of financial institution engaged in something that use to be illegal that is now known as credit default swaps. So if any politician seeking your vote says he or she is for Derivative trading, don't vote for him or her, derivatives are bad for a capitalistic economy and are full of moral hazard.

Bad Bank: An entity (the "bad bank") that is legally separated from the bank that created it (the "good bank") and into which are placed problem loans (or other troubled assets). Usually created by banks to clean up their balance sheets.

The Real Scoop: Don't you wish you had a bad wallet, and this wallet was separate from the good side of your wallet even though it resided under the same ass cheek? And inside this "separate" wallet the benevolent government would give you close to 0% loans to pay off the bad side of your wallet for all the dumb s**t you wasted your money on. At the same time, the Federal Reserve, allows you to fractionalize those loans the government is giving you, meaning they can lend that money (our tax dollars), over and over again to you and I at interest rates anywhere between 4-30% (anything above 7% use to be known as usury until congress in the 80s started making babies with Wall Street). So now we get to pay the banks interest on the money our government bailed them out with using our tax dollars, so the banks can make a profit and pay our government back the money you and I supplied them with by issuing credit and loans with usury interest rates and obscene fees and hidden charges. Wow, bad banks really are bad.

Mortgage-Backed Securities or MBS: A set of similar mortgages bundled together by a financial institution and sold as one security - a type of ABS.

The Real Scoop: MBS should be know as "I can't believe it's not crap"; because these packages of high risk bad loans stuck on the backs of a few good loans to create a false triple A rating from the corrupt rating agencies for these security packages pretty much brought down the financial markets, coupled with the first part of the fraud which was to artificially created a housing bubble in order to create MBS packages that would make billions for all in on the scam and cost America it's shot at the home-owner dream.

Legacy Assets: Also known as troubled assets, legacy assets are real estate-related loans and securities (legacy loans and legacy securities) that remain on banks' balance sheets and that have lost value, but are difficult to price due to the recent market disruption.

The Real Scoop: Once again creating redundant terminology in an attempt to confuse and over complicate. Legacy assets are only troubled assets in depressed markets, if the market rebounded and the housing prices recovered these legacy assets would probably be profitable again - but since they aren't profitable right now and not creating the revenue stream they use too, banks wants us to purchase them off their books so they get paid and we hold the risk.

Legacy Loans: Underperforming real estate-related loans held by a bank that it wishes to sell, but recent market disruptions have made difficult to price.

The Real Scoop: Banks can accept 'other real estate related collateral' to cover loans they are issuing. The problem is these real estate-related collateral have been improperly assessed or fraudulently strengthen to make the numbers work on some excel sheet. Since the real estate-related loans are backed by misjudged assets that no-longer cover the initial loan and if the initial loan goes bad or made unsellable like they are now in our current market, the banks aren't making as much cash as their greedy coal-hearts require and they shut lending down to make all of us feel their financial pain until we give in and give them trillions of our dollars to right their books.

Legacy Securities: Troubled real estate-related securities (residential mortgage-backed securities (RMBS), commercial mortgage-backed securities (CMBS), and asset-backed securities (ABS) lingering on institution's balance sheets due to an inability to determine value.

The Real Scoop: Like their toothless cousin the Legacy Loan, Legacy Securities are just packaged Legacy Loans that aren't selling for what the banks want, so Treasury is going to sell them to us, the public, because we would want something the banks consider dead dogs....right?

Systemically Significant: A financial institution whose failure would impose significant losses on creditors and counterparties, call into question the financial strength of other similarly situated financial institution, disrupt financial markets, raise borrowing costs for households and businesses, and reduce household wealth.

The Real Scoop: The Bush Administration had some funky terrorist-color code; this Obama Administration has 'systemically significant' nonsense to scare us into handing over our hard worked dollars so we can be forced into paying off a small number of deceitful people while they continue to reduce our quality of life and wages.

Illiquid: Assets that cannot be quickly converted to cash.

The Real Scoop: Assets can be anything from a million dollar painting purchased by the corporation for decoration in some executive's office or it could mean a stinky loan that has gone bad and is now worthless, but may be worth something in the future making it unable to be converted into cash or at least the amount of cash those holding it believe it to be worth at this time.

Insolvent: A condition where a financial institution has liabilities that exceed its assets. By definition, shareholders' equity in such a situation will be negative.

The Real Scoop: Financial Institution through deceptive book-keeping and all out fraud in many cases have deceived share holders and cannot cover the loans and bets they made and are now holding our economy hostage for their bad decision, and for some reason our government believes these institution cannot go bankrupt or else all hell will break loose here on earth.

Secondary Market: Created when banks sell a portion of their loans to a dealer who then pools the loans together and sells portions of the loan pools as securities to investors. The secondary market serves as a source of cash for banks, providing them money to make new loans.

The Real Scoop: Now this is why people hate bankers and "wizards" in the financial world, that do nothing more than create wealth out of their back-side. Banks who already over-leverage through fractional reserve banking are now able to sell a portion of a loan, thus reducing their risk by the portion off-loaded to this middle-man who creates loan pools to be sold as securities, and the middle-man loves it because he is getting reduced-interest rate loans to package and sell for a profit, and the investor loves the dividends off their investment when times are going swell - too bad its all based on imaginary money and when times are bad and people want that imaginary money, the secondary markets crash hard because it doesn't exist, unless of course Daddy Warbucks Geithner or J.P. Bernake write them a nice check with our tax dollars to uncook their books.

Special Purpose Vehicle ("SPV"): An entity whose operations are limited to the acquisition and financing of specific assets.

The Real Scoop: Treasury is creating the ability for companies to purchase these legacy loans through an auction process, of course regulated by either Treasury or the Federal Reserve, and you can bet that you and I out on the streets won't be invited to participate. These SPVs can purchase these legacy loans with loans from our government that will be backed by the FDIC, and they will be matched dollar-for dollar with TARP funds to buy these assets that most likely will be profitable in 5 years once the markets recover and begin growing again. So these specially picked SPVs will not only get a loan where every dollar they put up will be matched by our tax dollars, if they fail to pay off this loan which is being used to purchase other loans, the FDIC, with our tax dollars will bail them out - wish I had a SPV.

Trust Preferred Security: A security that has both equity and debt characteristics. Trust Preferred Security is created by establishing a trust and issuing debt to the new trust. A company would create a trust preferred security to realize tax benefits, since the trust is tax deductible.

The Real Scoop: The above definition is offensive in its deceptiveness. A Trust Preferred Security (TPS) created by the Federal Reserve in 1996 is the next shoe to drop in this financial meltdown, and is another made up practice to benefit the banks at the people's risk. Banks can create pools of debt and credit in one mocked up full of crap nonsense pool of assets that has extremely long pay outs, offers tax deductions and is the Frankenstein of bad banking practices. In 1999 the Clinton Administration Treasury Department, argued that TPS masks the debt in an offering and therefore mislead the investors about the potential risks of the firm, as well as creating a loss of revenue to the federal government; too bad a lot of the Clinton Administration was in bed with Wall Street or else someone might have listened. TPS also create false T1 readings that investors use when determining the "supposed" health of an institution, and with the TPS issuing by banks going up every year since the Federal Reserve has permitted the act, the banks that created the most TPS, thus deceiving the investors with a false bill of health and they became invested in heavily and reaped the rewards over banks that had a lower ratio of TPS and in were actually the stronger bank. Most banks use TPS to restructure capital, meaning moving assets from one group of bad bets to a group of not so bad bets in an attempt to make more money and make the bad bets not look so bad so they can sell it off to the next sucker in line. Usually practiced by companies that are generally doing poorer than expected and wish to stabilize future performance of their assets.

TALF Process: TALF (Term Asset-backed Securities Loan Facility) is part of TARP (Troubled Asset Relief Program) works when an eligible borrower contacts a primary dealer about receiving a TALF loan. The primary dealer submits to The Bank of New York Mellon (BNYM), who are a global bank, a request for a loan for the borrower and the borrower's pertinent information. If BNYM approves the loan they give the primary dealer a list containing the borrower's loan amount with an extremely low interest rate, always much lower than the interest rates they are already receiving on all their toxic assets along with the cost in administration fee to create the loan. Now if the borrower defaults again on this loan, they get to keep the money, and the Federal Reserve Bank of New York will acquire all their remaining worthless assets and the difference will be charged off to the U.S. government.

The Real Scoop: These financial institutions that are in trouble and need TALF money will get loans at super low rates, rates you and I would never see even if we had a perfect credit score. They do this so the amount of interest still coming in on their toxic asset back securities can pay for the monthly loan cost while returning marginal profits to the financial institution that borrowed the money. If these institutions don't pay back this debt, the Federal Reserve Bank of New York using our tax dollars will pay the loan off for these unscrupulous financial institutions. On top of that BNYM is a global bank that will profit through administration fees and interest on all these loans, which means we will be paying foreign interests off anytime a company, which is usually also a global institution receives our tax dollars in TALF or TARP funds.

Federal Funds (Target) Rate: The interest rate that financial institutions charge each other for overnight loans of their monetary reserves. A rise in the Federal funds rate (compared with other short-term interest rates) suggests a tightening of monetary policy, whereas a fall suggests an easing. The Federal Funds Target Rate is an interest rate goal set periodically by the Federal Open Market Committee.

The Real Scoop: Another classic example of creating numerous names to describe one thing in an attempt to create an illusion of separation and independence. The Federal Open Market Committee is comprised of members from the Federal Reserve Banks. There is no difference between the Federal Reserve and the Federal Open Market Committee. Furthermore when the Fed. alters the Federal Funds Target Rate they essentially reduce or increase the amount of money and credit in the system. This is why we keep having bubbles and bursts because they see trouble or prosperity and over compensate one way or another with their meddling on the Federal Funds Rate - one of the biggest flaws in Keynesian economics.

EESA: Emergency Economic Stabilization Act of 2008, a law enacted to response to the global financial crisis. This act created TARP and authorized Treasury to spend up to $700 billion to purchase troubled assets.

The Real Scoop: Congress who have had their campaigns heavily financed by the financial sectors for the past several years, got together to create an unprecedented act to use our tax dollars to assist domestic and global financial entities.

Targeted Investment Program or TIP: A direct-investment program through which Treasury can invest in institutions whose failure would threaten similar institutions and the economy in general.

The Real Scoop: Even though Treasury already had unprecedented powers bestowed upon him under TARP, he thought it was necessary to create a side program where he alone decides which institutions will receive direct-investments not loans but investments. Timmy, get your hand out of my pocket!

Financial Stability Plan or FSP: A Dept. of Treasury plan to stabilize and repair the financial system, and support the flow of credit necessary for economic recovery.

The Real Scoop: Timmy G in all his great wisdoms and time spent at the Federal Reserve watching this entire meltdown happen before his willing eyes is now going to solicited the help of other investment bankers that created the problem to come up with a plan to stabilize and repair their mess on our dime so they can do it all over again at a later time.

Asset Guarantee Program or AGP: An insurance-like program which allows Treasury to assume a loss position on certain troubled assets held by qualifying financial institution.

The Real Scoop: Treasury is busy creating every possible program under the sun in order to bail out these financial institutions no matter how fraudulent or corrupt their business is. If Treasury doesn't give you TARP funds, it may invest through TIP or TALF and if neither happens and your financial institution still fails they will help you out through AGP - if you are a working American and you don't pay your bills or made bad bets there aren't any programs for you.

Qualifying Financial Institutions or QFIs: Private and public U.S. controlled banks, savings associations, bank holding companies, and certain savings and loan holding companies.

The Real Scoop: Qualifying as if Qualifying is a concrete meaning with rigid structures of checks and balances. Who is in charge of qualifying these institutions? What are the individual motives and attachments to these institutions by those qualifying them? Who is keeping checks and balances on the qualifiers?

Tier One Capital or T1: Common Equity + Preferred Equity + Retained Earnings - Goodwill.

The Real Scoop: Umm, is that really the definition, some equation where one of the variables is Goodwill? Goodwill meaning in financial terms, the excess of purchase price over fair market value of net assets acquired under the purchase method of accounting. T1 is also known as "core capital" that is used to determine the strength of a bank or financial institution and that suppose to measure the bank's ability to pay off depositor's demands while sustaining future losses in a bunky economy. T1 was created by the "Basel II Accord" which I suggest you all research into as it's a global cartel of bankers supposedly regulating banking, you can figure out how well that's working. So anyway T1 capital is pretty much nonsense since it can be manipulated by the Federal Reserve or any government purchasing massive preferred shares from a bank or financial institution creating a false reading of the health of these institutions.

Tangible Common Equity or TCE: Common Equity - Intangible Assets.

The Real Scoop: Again another equation from bankers to muck up making-sense of anything. TCE is supposedly the more conservative measure of capital adequacy of a bank or financial institution. Basically it's a measure of what the banks or financial institutions would have left after dissolving all creditors and higher levels of stock. TCE is suppose to give us a more "real" look at the solvency of a bank, but it doesn't include Preferred stock in its equation.

Credit Protection: Security against losses on an investment. For TALF purposes, TARP funding is used as credit protection on the Federal Reserve loans (i.e., losses on the loans are absorbed by TARP funds up to the commitment amount.)

The Real Scoop: When you and I are offered credit protection we are charged for it and it usually covers us on a few missed monthly payments. Since our benevolent government has decided to raise bastardized financial institutions with our hard earned tax dollars, the Federal Reserve, i f they choose can make loans to an institution for $100 million; and if that institution doesn't pay it back we the tax payers will cover the full amount lent out by the Federal Reserve who isn't a fully federal institution to begin with. So not only is the Federal Reserve charging us interest on the money we allow them to print for us the American people, we are on the hook for any bad loans they make to toxic financial institutions - that's some credit protection!

Convertible Preferred: A preferred stock that is convertible into common stock. In the context of CAP, the conversion is at the option of the Qualifying Financial Institution until year seven when it becomes mandatory.

The Real Scoop: This is another classic example why our financial system does not work for the majority of American citizens, those in charge set up favorable conditions for banks and financial institutions at the cost of the taxpayers and everyday consumers. Financial institution who received government bailout money in the form of common shares are required to pay our government dividends, so if they convert their common shares sold to the government with our tax dollars to convertible preferred stock, they no longer have to pay the government dividends and the risk will be put on the taxpayer if the institution fails.

Senior Preferred Stock: Shares that give the stockholder priority dividend and liquidation claims over junior preferred and common stockholders.

The Real Scoop: Another way for the in-crowd to receives preferential treatment over the common stockholder.

Non-Cumulative Preferred Shares: Shares where unpaid dividends do not accure when a company does not make a dividend payment.

The Real Scoop: Well for those of us that have no idea what accure means in financial lingo we'll start there. Accured in financial terms means to carry over, so if you had a non-cumulative share in Company A, and they didn't pay you dividends even though you should have received them, you cannot sue Company A at a later time for said dividends. Why anyone would want non-cumulative preferred shares is unknown to me.

Bank Holding Company or BHC: A company that controls a bank. Typically, a company controls a bank through the ownership of 25% or more of its voting securities.

The Real Scoop: I love this definition they refer to a bank as if it's an individual entity and not a company just like the company that controls them.

Savings and Loan Holding Company or SLHC: A company (other than a BHC) that controls a savings association.

The Real Scoop: Through numerous deregulations and the allowance for financial service companies to merge with other investment companies and insurance companies to create banks that aren't special in any way and in fact have thrown out the idea of safety and soundness in their lending practices. Because the illusion of separation is required we have the SLHC term, but you can look at both BHC's and SLHC's in the same manor.

Ring-fencing: Segregating assets from the rest of a financial institution, often so that the assets' problems can be addressed in isolation.

The Real Scoop: This is bull doo doo! Ring-fencing is another term used to explain "bad banks" - since you and I, the American public, didn't like the term "bad bank" and we are perceived to be too stupid to understand that ring-fencing is just that same thing as creating a "Bad Bank" (see definition above), our government has decided to use the more gentle term, ring-fencing instead.

Exchange: In reference to Citigroup agreement, taking one type of stock (i.e. preferred) and converting it at a specific rate to another type of stock (i.e., common).

The Real Scoop: Citigroup taking their risk and converting it to tax payer risk, end equation, we get stuck for the bill, Citigroup makes billions.

Covered Asset: An asset owned by Citigroup or any of its subsidiaries that is included in the ring-fence.

The Real Scoop: Companies have toxic assets, which are also known as a covered asset that has been moved to an imaginary "bad bank" or has been ring-fenced on the company's balance sheets. Redundant words to explain very simple scams seem like all these experts are good at doing.

Non-Recourse Loan: A secured loan whereby the borrower is relieved of the obligation to repay the loan upon the surrender of the collateral.

The Real Scoop: Once again our benevolent government ran by the Federal Reserve is quick to cuddle one of their failing financial institutions and will loan these institutions money to pay off their toxic assets that have now become covered assets. If the financial institution still can't pay back the government on this non-recourse loan then the Federal Reserve will absorb 90% of the loan to help pay it off up to $10 billion dollars with our tax dollars.

Senior Oversight Committee ("SOC"): Consists of Citigroup's Chief Financial Officer, Chief Risk Officer, General Counsel, Controller, Chief Accounting Officer, and the Treasurer.

The Real Scoop: The same folks who came up with these sophisticated and complex financial tools that brought down the economy with the help of those who oversaw and were suppose to regulate it (Timothy Geithner head of New York Federal Reserve 2000-2006) are now going to put on their serious faces and thinking caps and make sure nothing like this ever happens again - or at least for another 10-15 years like it always will in a debt slavery economy.

Derivative Asset: An asset whose stated value or cash flow is determined by reference to the value or cash flow of another asset (the "underlying asset").

The Real Scoop: Let's say a financial institution makes a bet for $50 that you will fail on your mortgage over the next 5 years. The underlying asset being the mortgage loan and the derivative asset being how much the financial institution is going to win if the bet comes in and you default on your mortgage.

Second Lien Debt: Is subordinate to a senior claim on the same collateral.

The Real Scoop: The above definition is once again inadequate to say the least. A second lien debt is all the loans created off a loan you already have - such as a second mortgage or home equity loan. Instead of refinancing your mortgage with one loan, its was much more profitable to hit you with two loans of different pay out times and varying interest rates creating a more heartier stream of revenue to the financial institutions holding the loans.

Securities Issuer: A separate legal entity that buys cash-flow-producing assets such as loans, pools them together, and sells portions of the pools of loans as securities.

The Real Scoop: Just another name for a financial institution most likely owned somewhere down the line by the same banks issuing the mortgages that can sell the interest from the loans as Securities for people to invest in, thus creating wealth off interest for the financial institutions who did nothing more than create a piece of paper with a supposed worth attached to it.

Pool Assembler (issuer): A separate legal entity that buys cash-flow-producing assets such as loans, pools them together, and sells portions of the pools of loans as securities.

The Real Scoop: Pool Assemblers, Derivative traders and even bankers practicing fractionalize banking all exist on a very faulty principal, which is centered on creating wealth from pieces of paper with no inherent value and profiting off of it until our economy collapses every 10-15 years.

Primary Dealers: Banks and securities broker-dealers that trade in U.S. Government securities with the Federal Reserve bank of New York for the purpose of carrying out open market operations. The 16 current primary dealers are BNP Paribas Securities Corp. / Banc of America Securities LLC / Barclays Capital Inc. / Cantor Fitzgerald & Co. / Citigroup Global Markets Inc. / Credit Suisse Securities (USA) LLC / Daiwa Securities America Inc. / Dresdner Kleinwort Securities LLC / Goldman, Sach & Co/ Greenwich Capital Markets Inc. / HSBC Securities (USA) Inc. / J.P. Morgan Securities Inc. / Mizuho Securities, USA Inc. / Morgan Stanley & Co Incorporated / UBS Securities LLC

The Real Scoop: The Federal Reserve and its cartel like bank structure are a main reason for our current economic mess. Not only is the Federal Reserve not a fully Federal institution they obvious serve and operate foreign interest. This is why there are currently two measures in congress to dissolve the Federal Reserve or at the very least audit this private bank, which has never been audited, ever. Those bills are H.R. 1207 and H.R. 833, please tell your statel representatives and senators to support these very important measures to restore balance to our economy and way of life again. If they don't support it, you can bet they are in on the take and should be swiftly voted out of office next election cycle.

Call Report: Quarterly report of financial condition commercial banks file with their Federal and state regulatory agencies.

The Real Scoop: Only the banking commissioner can order these banks to make public their Call Reports, I wouldn't hold your breathe.

Custodian Bank: The bank that holds the collateral and manages the accounts for the Federal Reserve Bank of New York.

The Real Scoop: If the Federal Reserve Bank of New York is a private-federal run institution - who the hell is managing the accounts and holding their collateral and are they private or for profit, and are they foreign based?

Synthetic ABS: A security that derives its value and cash flow from sources other than from a physical set of reference assets.

The Real Scoop: When you are creating synthetic piece of bull droppings you know you are in one messed up, greedy, scam and fraudulent filled economy. Basically synthetic asset backed securities are created through credit default swaps and derivative trading full or moral hazards and bad for any free market economy.

London Interbank Offered Rate ("LIBOR"): The interest rate that large banks in London charge each other for dollar-denominated funds.

The Real Scoop: Just another way the banks have separated themselves from the rest of us - when we need a loan we get one from a bank at a pretty high interest rate, when banks loan money to one another the interest charged is well below the market price and this is thought of as a generally accepted standard in the banking world.

Professional Forecasters: The three forecasters used for the purpose of the stress test were the Consensus Forecasts, the Blue Chip Survey, and the Survey of Professional Forecasters.

The Real Scoop: Consensus Forecasts is part of the Consensus Economics Corporation and basically tallies up opinions from economist from around the world and produces a forecast off of those opinions. Blue Chip Survey basically does the same thing but with fewer economists polled and the same can be said for the Survey of Professional Forecasters - this isn't some full-proof or highly accurate forecast as they all have been wrong numerous times throughout their long term histories.

Collateralized Debt Obligation: A security that entitles the purchaser to some portion of the cash flows from a portfolio of assets, which may include bonds, loans, mortgage-backed securities, or other CDOs.

The Real Scoop: When debt is the main income creator on any financial instrument or agreement you are no longer in a capitalistic market you are in a debt-slavery market.

7(a) Program: Small Business Administration loan program guaranteeing a percentage of loans for small businesses that cannot otherwise obtain conventional loans at reasonable terms.

The Real Scoop: Financial institutions and any small business under the 7a Program get loans at reasonable terms - you and I get usury loans, which do not have reasonable terms and that take years to pay off. I think it's about time for our government to create the '90 million Us-Program' to help the working American out.

By Claude Morton - Claude Morton produces independent movies including a couple festival award winning do-it-yourself micro-budget features. Claude loves researching and writing about all things political and enjoys reviewing...  





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