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WOW! Everyday brings new revelations. We've been robbed!
excerpt: Now we know: Geithner and Friedman interceded on behalf of Goldman and Wall Street (Merrill received $6.2 billion, Societe General - a whopping $16.5 billion) to deliver a stealth bailout, one that wouldn't need Congressional approval, and even better wouldn't require the counterparties to pay any of it back NOR would it require that they issue shares, warrants or any other instrument to AIG (taxpayers) in return for more than $32 billion in free money.
In any other time, a sitting Treasury Secretary who interceded on behalf of Wall Street to screw taxpayers out of tens of billions, would not be sitting long. But Democrats control both the House and Senate, so there are no investiagtions (Issa's letter aside). Traditional media is content not to rock the boat for President Banks Obama lest they be shunned by their peers, and ultimately, 99% of TV and print journalists don't understand the issues well enough to complain with any conviciton, especially against the merry backdrop of the Dow rising and their deflated 401ks beginning to show life.
They fall prey to fear and weakly submit to duplicitous hyperbole (Paulson threatening martial law and blood in the streets), when they should instead be consulting with the objective, critical voices who foresaw the crisis and were prepared with alternative solutions when it finally came (Stiglitz said instead of TARP, create new banks).
A pox on Congress, President Banks Obama, Bush, Paulson, Friedman, Bernanke and Geithner (plus Greenspan and Rubin). You may have gotten away with it for now, but I would wager there are a few million of us, roughly, who do understand everything that went down last Fall, and we're not amused. We're not just going to let this one pass, and we will not stop filling the vast interweb with the truth (and our distaste and vitriol for your wretched souls) day after day, week after week, all over message boards and finance blogs, until justice is served.
Bob Moriarty from 321 Energy provides a brief explanation of the fundamentals - excerpt: I’ve made it clear for a year that I believe we have entered what will be the most serious depression in history. It also will involve the greatest transfer of wealth in history.
There are two basic classes of assets. There are paper assets and real assets. An ounce of gold is a real asset. A copper mine is a real asset. A house is a real asset. An oil field is a real asset.
Over the counter derivatives now total over $596 trillion dollars, (click here [pdf]) ten times the size of the world economy. Those are paper assets, their value is derived from some other asset. That derivative size is what is going to destroy the world’s financial system, it’s all fraud.
A mortgage is a paper asset. A T-Bill or T-Bond is a paper asset. A $100 bill is a paper asset. It’s pretty easy to see that a $500,000 mortgage on a house now worth $250,000 isn’t worth very much. Latest figures show 9.6 million homes in the US have negative equity. How many of those loans are going to be paid back?
According to an ex-Fed Director, both Fannie Mae and Freddie Mac are bankrupt. They were leveraged 65-1. For those comforted by the thought of the FDIC bailing you out should the banking system fail entirely, you need to realize the FDIC is leveraged at 130-1. We are told that the collapse of Washington Mutual alone could bankrupt the FDIC.
In a depression, no real assets appear or disappear. Paper assets, on the other hand, turn to vapor. But the ownership of real assets will change as the real assets move from weak hands into strong hands.
Those bastard banks have taken over $2 Trillion from the taxpayers, and are using this cash to invest in emerging markets instead of the USA. The Feds are providing interest free money to central banks, which then are used to invest in emerging economies. The bankers get the profits and USA taxpayers get stuck with the cost.
<br><br>There is no possible upside for USA taxpayers unless of course you agree with Obama that the USA standard of living and extraordinary economic prosperity must be lowered before global economic equality can be achieved. This isn't just about greedy bankers and self interested international corporations. Wealth redistribution is now the official policy of our government. And the Federal Reserve is carrying it out with unexpected zeal.
<br><br>The numbers are coming in. The facts are on the table. The USA is being gutted. The surprise here is that the redistribution of wealth is not from rich Americans to poor Americans. The transfer of wealth is from all Americans, including the yet to be born, to the emerging economies of the world.
<br><br>excerpt: Asian stock prices are shooting up, in part due to low interest rates in the U.S. Investors looking for higher yields are borrowing in U.S. dollars and then pouring that money "into countries that are growing more rapidly," said Stephen Cecchetti, chief economist at the Bank for International Settlements, the central banks' central bank, which warned early of the last asset bubble and is beginning to do so again. "That runs the risk of creating property and equity booms in those countries."<br><br>
\n\nAbout $53 billion has gone into emerging-market stock funds this year, according to data collector EPFR Global. Through Monday's trading, the broad MSCI Barra Emerging Markets Index this year was up 60.7%. Brazil was up 100%, and Indonesia had gains of 102.7%. Over the same period, the Dow Jones Industrial Average was up 11.5%.
Whoa! Incredible fact filled analysis of the pre election GDP numbers released by Obama.
excerpt: Disposable personal income decreased in nominal terms q/o/q by 5.9% while in real terms (inflation adjusted) it decreased q/o/q by 7.4%! That is an enormous swing in purchasing power and not in the right direction!
Personal outlays increased $148.2 billion (5.8 percent) in the third quarter, compared with an increase of $8.2 billion (0.3 percent) in the second. Personal saving -- disposable personal income less personal outlays -- was $364.6 billion in the third quarter, compared with $533.1 billion in the second.
The personal saving rate -- saving as a percentage of disposable personal income -- was 3.3 percent in the third quarter, compared with 4.9 percent in the second.
So into decreasing personal income and disposable personal income people tried to spend anyway. Best guess: most of this was "cash for clunkers", which is the worst sort of "spending" - it is the taking on of more debt by replacing a paid-off car with one that now comes with a shiny (and nasty) payment book. The Trade: Go long auto repo outfits (aside: as far as I know there are no publicly-traded repo companies.)
Nothing in here I like; to the contrary, this report sucks and on a drill-down appears to be full of outright lies.
A compiled list briefly profiling Obama's most important associations. Most of whom are radical Marxists, racists and social revolutionaries hating Christians, Jews, and the ordered liberty guaranteed by our Constitution. The list includes William Ayers, Carol Browner, Frank Marshall Davis, Anita Dunn, Dr. Eziekiel Emanuel, Rahm Emanuel, Chai Feldblum, Patrick Gaspard, Eric Holder, John Holdren, Valerie Jarret, Kevin Jennings, Van Jones, Mark Lloyd, Cecelia Munoz, Cass Sunstein, and uber racist Jeremiah Wright. Good cheat sheet for future reference.
In depth story about the Federal Reserve failure to act as an unregulated subprime mortgage industry raced out of control, and major banking and financial institutions bought into the wild wild west of high interest rate - predatory lending.
excerpt: during the years of the housing boom, pleas from consumer advocate groups failed to move the Fed, the sole federal regulator with authority over subprime mortgage businesses. Under a policy quietly formalized in 1998, the Fed refused to police lenders' compliance with federal laws protecting borrowers, despite repeated urging by consumer advocates across the country and even by other government agencies.
The hands-off policy, which the Fed reversed earlier this month, created a double standard. Banks and their subprime affiliates made loans under the same laws, but only the banks faced regular federal scrutiny. Under the policy, the Fed did not even investigate consumer complaints against the affiliates.
Excellent read. The financial crisis is examined in an informative but breezy way. The conclusion however isn't good. We're out of options, and there doesn't seem to be anyway of stopping the explosion of government debt that will, sooner or later, crush us. Great read!
Let stupid firms fail.
We need to get back to that.
Yes, the fact that the "stupid firms" this time around included most of Wall Street shows that special rules of financial bankruptcy should apply so the whole system doesn't collapse. But the firms need to be allowed to fail.
What should the special rules of financial bankruptcy be?
managements should be tossed
compensation contracts and other liabilities should be torn up,
bonus pools should be zeroed until the firms return to annual profitability
equity and preferred holders should be wiped out, and
junior bondholders should get a major haircut through the immediate, forced conversion of debt to equity.
All of this should happen not over years in the courts, but overnight--in the manner in which the FDIC seizes failing banks.
In such proceedings, all of Wall Street's idiocy enablers will lose their shirts: The folks who work the at the firms, the folks who lend money to the firms, the folks who invest in the firms and trust the firms' managements to be something other than morons.
Losing your shirt generally has a sobering effect on decision-making. As long as managers, lenders, and shareholders know they will lose their shirts, the next generation of Wall Street enablers will likely be far more careful and demanding than their predecessors, at least for a little while (and don't hallucinate that the Fed's new policy is anything other than temporary).
A slide set featuring the corruption bio of the top 16 most corrupt members of congress. Incredible. Seems like the longer these clowns serve, the more corrupt and innovative they become. Kudos to the
This top tier listing must have been very competitive. Missing are criminals like Chris Dodd, Kathleen Sebelius, and Barney Frank. Frank and Dodd are almost single handedly responsible for the Fannie Mae - Freddie Mac mortgage crisis that tripped the entire global economy.
Not What They Had in Mind: A History of Policies that Produced the Financial Crisis of 2008.
GMU economist and popular blogger Arnold Kling has released a new paper titled: "NOT WHAT THEY HAD IN MIND: A History of Policies that Produced the Financial Crisis of 2008."
Kling is very much of the view that if you had to choose between blaming private sector greed and public policy, the fault lies in the latter:
As this paper will illustrate, the seeds for much of the current crisis were sown in the policy “solutions” to previous financial and economic crises. Any attempt to dissect and understand the current crisis that does not account for the complex history, evolution, and integrated nature of financial regulations will not yield meaningful lessons for today’s policy makers.
Among the topics he addresses: housing policy, bank capital regulations, monetary policy, and bank capital regulations. Incredible
A system where bank lobbyists have been spending in record numbers to make sure it stays that way.
A system that corrupts the most basic principles of competition and fair play, principles upon which this country was built.
It is a system that so far has forced the taxpayer to provide the banks with the use of $14 trillion from the Federal Reserve, much of the $7 trillion outstanding at the US Treasury and $2.3 trillion at the FDIC.
A system partially built by the very people who currently advise our President, run our Treasury Department and are charged with its reform.
And most stunningly -- it is a system that no one in our government has yet made any effort to fundamentally change.
Economic comparison that describes the prosperity differences between a Republican led congress and a Democratic controlled congress.
Excerpt: If you want to give Bill Clinton credit for economic results during his terms, you have to link those results to his policies. If you want to give him credit for those policies, you must admit that they were virtually all in line with Republican rhetoric and antithetical to modern liberalism.
But here's what you can't do and remain intellectually honest: praise Clinton and damn Bush, and then encourage Obama to do the exact opposite of what Clinton did and to add multiple trillions of dollars to Bush's spending and deficit levels.
Conservatives like me have always encouraged tax rate cuts, spending cuts, free trade and eliminating government programs like welfare and the byzantine farm program. Reagan did what he could (with a Democrat-controlled House the entire time), and the economy grew 3.5% annually over his eight years. Clinton did these things as well (with Republicans controlling both houses of Congress his last six years), and the economy grew 3.8% annually over his eight years.
This is not hard: cut taxes, cut spending, cut programs. Oh, and elect Republicans to the Senate. At least that's what the facts say.
Half of all subprime mortgage backed securities wound up on the balance sheets of banks. This fact surprises many people who think that the problem with securitization is that it let banks off-load risky loans onto investors. If that was the strategy, however, banks wouldn’t have wound up with such huge holdings of subprime securities.
So why did banks snap up so many mortgage backed securities? Even banks that were originating mortgage loans preferred to securitize them, and then hold the securities. Why would they do that rather than just hold the loans?
The answer is that bank regulations encouraged them to own securities rather than loans. Under the international Basel capital requirements, a well-capitalized bank was required to hold $4 for every $100 in individual mortgages—a 4% reserve requirement. But if it held the securitized the AAA and AA tranches, the bank only had to hold $1.60 in capital. That’s a huge incentive to trade in a loan for a mortgage backed security.
But the capital regulations did more than just create incentives to own mortgage backed securities. They allowed banks to dramatically increase their balance sheets. The lower reserve requirement allowed banks to buy even more securities than it could make loans. A bank with $4 billion in reserve could hold $100 billion in loans. But that same $4 billion could instead be used to invest in $250 billion worth of mortgage backed securities.
A declaration of War on the status quo ..... Excellent point-by-point summary of what has to be done to restore American liberty and prosperity, and the important role Sarah Palin can play.
This article presents a conservative manifesto describing wha thas to be done to save America. The points are absolutely excellent.
Excerpt: Mrs. Palin, you are now free of the Republican Party. The Party needs you more than you need it. To say that the Republican Party, on its own, has a charismatic void is a vast understatement. You are now free to wage all out war on the status quo. More importantly you are free to fashion a Reagan-esque Conservative alliance on your terms.
At the risk of being presumptuous, I would suggest the following lines of attack for your war against the Democrats and the Obama/ Pelosi / Frank/ Dodd Economy. Free market capitalism must be emphasized as our only true hope for recovery -- not the crony capitalism of the Democrats.....
Points include Energy Policy, Term Limit Congress, Repeal of government over-regulation, Taxes, the Judiciary, Border Protection, Abortion, Foreign Policy, and Dick "the Churchillian" Cheney
So where is the new Obama administration likely to take us? Seven things seem certain:
The U.S. military will withdraw from Iraq quickly and substantially, regardless of conditions on the ground or the obvious consequence of emboldening terrorists there and around the globe.
Protectionism will become our national trade policy; free trade agreements with other nations will be reduced and limited.
Income taxes will rise on middle- and upper-income people and businesses, and individuals will pay much higher Social Security taxes, all to carry out the new president's goals of "spreading the wealth around."
Federal government spending will substantially increase. The new Obama proposals come to more than $300 billion annually, for education, health care, energy, environmental and many other programs, in addition to whatever is needed to meet our economic challenges. Mr. Obama proposes more than a 10% annual spending growth increase, considerably higher than under the first President Bush (6.7%), Bill Clinton (3.3%) or George W. Bush (6.4%).
Federal regulation of the economy will expand, on everything from financial management companies to electricity generation and personal energy use.
The power of labor unions will substantially increase, beginning with repeal of secret ballot voting to decide on union representation.
Free speech will be curtailed through the reimposition of the Fairness Doctrine to limit the conservative talk radio that so irritates the liberal establishment.
These policy changes will be the beginning of the Europeanization of America.
Stephen CalaBresi of the Federalist Society describes Obama's view of the Constitution, and what he means by "negative liberties" and "economic and social justice". Calabrese also discusses the situation with judicial appointments and how these opportunities for the socialists will move us towards Obama's dream of replacing the rule of law and equaility before the law with the law of Obama empathy.
Calabrese's conclussion, "Nothing less than the very idea of liberty and the rule of law are at stake in this election. We should not let Mr. Obama replace justice with empathy in our nation's courtrooms".
What follows is by no means comprehensive, but it does shed some much-needed light on a number of Obama’s positions, statements, and associations about which he has been less than honest. We’ve attempted to boil each issue down to a succinct explanation with an accompanying, brief video clip—often starring Barack Obama in his own words. Before pulling the lever for someone who hopes voters will ignore his paper-thin resume, unsavory associations, and hard-left voting record, each citizen has a duty to do his due diligence.
The "change" he peddles is not new. We've seen it before. It is change that diminishes individual liberty for the soft authoritarianism of socialism. It is a populist appeal that disguises government mandated wealth redistribution as tax cuts for the middle class, falsely blames capitalism for the social policies and government corruption (Fannie Mae and Freddie Mac) that led to the current turmoil in our financial markets, fuels contempt for commerce and trade by stigmatizing those who run successful small and large businesses, and exploits human imperfection as a justification for a massive expansion of centralized government. Obama's appeal to the middle class is an appeal to the "the proletariat," as an infamous philosopher once described it, about which a mythology has been created. Rather than pursue the American Dream, he insists that the American Dream has arbitrary limits, limits Obama would set for the rest of us — today it's $250,000 for businesses and even less for individuals. If the individual dares to succeed beyond the limits set by Obama, he is punished for he's now officially "rich."
All three liberal waves have transformed American expectations of the state. The spirit of the age is: Ask not what your country can do for you, demand it. Why can’t the government sort out my health care? Why can’t they pick up my mortgage?
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A collection of commentary providing the historical context of America's turn from free-market private enterprise Capitalism, to big government Socialism. Covers the historic role of Fannie Mae and Freddie Mac in bringing the financial world to it's knees, linking the Roosevelt socialist policies...
Updated on 2009-11-07
Created on 2008-10-26
Category: Government & Politics
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