Me, a Socalist? Part Deux

Socialism or facism, you decide.

The Federal Reserve, Inc. (a private institution) and the Treasury (headed by Hanky Paulson, the former chariman of Goldman Sachs) have already shown repeatedly their preference of fictitious corporate entities over living breathing voting citizens.

Continuing to over-reach beyond their mandate, Paulson and Bukkake are making a naked grab for power, soviet-style.

Who’s side do you think they will come down in in the future?

Exactly.

When the Federal Reserve, Inc. was established, it was in response to instabilty in the markets. But then just a few years later we had ourselves a Great Depression.

(Note: for most citizens it wasn’t all that great.)

Well done! And the Fed’s record since isn’t without some major blemishes.

Maybe the answer isn’t more power to the Fed, Inc., but rather no less than complete elimination.

Else it is buh-bye America, it was nice knowin’ ye.

“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men.

We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.”

-Woodrow Wilson

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UPDATE
Opinion piece in today’s (3/31) by Paul Krugman that clarifies Paulson’s ture intentions about regulating hedge funds et al:

Thus, in a draft of a speech to be delivered on Monday, Henry Paulson, the Treasury secretary, declares, “I do not believe it is fair or accurate to blame our regulatory structure for the current turmoil.”

…

Oh, and the Bush administration actively blocked state governments when they tried to protect families against predatory lending. 

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If the SEC wasn’t asleep at the wheel the last four years, would Bear Stears have belly-flopped?

Certainly, had the Fed, Inc., had access to the information as Paulson proposes, it would not have mattered one iota, and BSC would have still imploded.

So it’s a naked grab for power, pure and simple. Setup the scenario that will likely create a bubble, and when it pops, promise to save the teeming multitudes (and financiers, who are oddly silent about the scheme) from their misery.

The Fed, Inc., has certainly demonstrated that it knows how to cause a bubble, or a Great Depression, but it has never demonstrated it has the ability- or indeed the desire- to stop one from occuring.

Therefore let’s all it what it is. The Soviet Cerntal Committee for Overight of Financial Markets of the USSA.

Comrade Bukkake, I am your most humble sevant. Death to capitalism!

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UPDATE
Heh, Paulson is all bark and no bite. It’s just more scamming and fleecing of the public- in other words, business as usual for the Bush adminstration.

the Paulson plan belongs in a fictional world where financial institutions do a good job in regulating and monitoring themselves. Unfortunately, that’s not the world we live in.

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“I like to be kissed when I’m being fucked”
Why do investment banks exist anyway?  One would suppose for their customers. But the reality is, they exist for the sole purpose of enriching the principals and their cronies.

At the expense of the public, who funds their parties on the beach in the Hamptons.

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It was a stroke of brilliance. Wall Street created a way to enable ordinary people to buy things they do not need with money they do not have in order to impress people they do not know.

Term o’ da day: “repossession riptide”

& some people aren’t wearing bathing suits.

Item: San Diego fliptards in massive deleveraging tailspin.

Note: the Cromer family was profiled by Money in 2004 under the heading “Tycoon in the Making”

Result. The interwebitudes never forget.

File it under: schadenfreude overdrive

Hat tip to the always lovely OCRenter of BMIT for this.

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“I believe Archimedes was merely making a point and he really didn’t mean for anyone to over leverage themselves into outer space.” -Paco Bell

Nuclear farts

JP is upping their offer? Why? As reported here the reason is:

“JPMorgan boosted investors’ optimism by lifting its offer for Bear Stearns to $10 per share from $2. The revised plan is aimed at soothing Bear Stearns shareholders upset over JPMorgan’s earlier offer, which was made at the behest of the Federal Reserve when Bear Stearns was near collapse.”

Ahhh, the newly poor BSC shareholders are upset about the hurried buyout offer. JP Morgan had second thoughts, and obv. they want to do the right thing. Isn’t that nice!? When it comes to making money, there are absolutely no hard feelings about fair play, and making full restitution to investors who in retrospect appear to have gotten dealt a bad hand at the (Liar’s) poker table. On Wall Street people sure play nice!

Karl sez:

“See, it appears that Bear managed to stick a nuclear bomb (and its ticking!) in the “merger agreement.” That, being a clause that survived even if the deal failed to close that obligated JPM to guarantee some of Bear’s liabilities!

“Oops.

“Rumor is that Dimon was apoplectic when he discovered this and suddenly there was interest in renegotiation.”

BUHUHAHAHAHA.

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“He who smelt it, dealt it.” -Some Wisenheimer

Follow the moolah

Socialist, me?

Capitalists pray for socialism

“In any case, the determination to suppress the destructive downside of capitalism and ensure permanent prosperity is a terrible idea that will not work. Permanent prosperity, after all, is what socialism was supposed to be about, and we’ve all learned that theory doesn’t work. I continue to find it a sad irony that Wall Street — the alleged bastion of capitalism — would cling so dearly to the hope of socialism.

“That’s exactly what the Fed is all about. Its central planners think they can pick the right interest rate with which to run the world, even as the evidence indicates that their efforts over the last 20 years have produced two epic bubbles. This story would strike any sane person as the stuff of nightmare. Sadly, it’s our waking reality.”

-Bill Fleckenstein

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Out of silver bullets?
The Fed has lowered interest rates six times since September- and most revolvers only hold six rounds.

Since the FFT was lowered to 2.25% today, that effectively puts it at or below the official rate of inflation. Essentially, free money. But is more debt what we need to cure our ills?

Besides that fundamental question, the interest rates for mortgages and credit cards are actually going up in spite of the FFT slashing, a sign the lenders are not too comfortable passing the savings on to borrowers in these uncertain times.

The revolver holding those special FFT .50 and .75 cal. cartridges is now effectively spent. Sure, they can go even lower- and this nation can look forward to emulating the ten-plus year long emergency Japan suffered through and is just now emerging from.

This action won’t keep housing sales from continuing to decline; nor borrowers from defaulting; nor banks from foreclosing. Indeed, expect housing prices to continue to drop, resulting in further defaults. Know that the true value of deriviatives will be kept locked inside the valuts of investment banks around the world until one day some guy named Margin makes that fateful call and… rinse, lather, repeat as long as there are banks extant.

Meantime, this country agonizingly sinks into a recession or depression from which it might never fully recover.

Such are the rewards of moral hazard.

Or not. Whadda I know, I’m no economist. (Thank Ged for small favors.)

And not one financier will have to return his bonus.

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“The Fed might actually start taking paper at one price and then find out (by the time XYZ financial institution is supposed to take it back) that the paper is trading at a different price. Inquiring minds would like to know what the Fed would do about these losses if the repo’ing entity was determined not to take back the collateral.” -Bill Fleckenstein

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“No investment banker left behind.” -Ben Bukkake

Financial Surveillance

is what caught Spitzer with his pants down.

Part of the “Patriot” <spit> Act’s provision for domestic spying, looking for transactions which could be bribes. Of course, those cash transactions could be looked at both ways.

Credit or debit? That is depenedent on who is doing the peeping.

So… obviously Spitzer was targeted. That doen’t excuse his monumental stupidity about this.

If he wasn’t smart enough not to get caught, then he isn’t slimy enough to be president.

Once again, it’s mourning in Amerika. It’s ‘who you know’ (*cough * bribe *cough) that is most important, and now also it’s ‘who you’ve pissed off‘ you need to remain cognizant of.

One positive thing, so far, congreff has resisted the Bushie’s demand for telco immunity. Dark cloud, meet silver lining. But how much will they take to sell that I wonder?

Finance, terrorism, politics, ruin, these are the things that fuel the Ameriken economy now.

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UPDATE
The Technology that Toppled Eliot Spitzer

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Doom. Gloom. Crash. Bust. The four seasons of insolvency.

Bushville near Ontario, CA

A run on an investment bank crashes Bear Stearns

20/20 hindsight.

Despite the fact that the market surged yesterday on news that S&P claimed the rating agencies were nearly finished with downgrades, as is usual it is what was left unsaid that was most revealing.

“March 11 (Bloomberg) — Even after downgrading almost 10,000 subprime-mortgage bonds, Standard & Poor’s and Moody’s Investors Service haven’t cut the ones that matter most: AAA securities that are the mainstays of bank and insurance company investments.’

So, yeah, they’e playing games of hide the sausage with one another. When you have an industry which is given the mandate to police itself (fox, henhouse, get it?), rather then by an objective commission (*cough* SEC *cough*) this is the result.

Is Bush fiddling while Rome burns? He says everything is cool, we shouldn’t worry, and we definitely shouldn’t panic.

When authority figures tell sheeple not to panic, they usually panic.

Next week should be an interesting one in the markets.

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“No man’s life, liberty, or property is safe, while Congress is in session.” -Mark Twain “

Phun

FREE MONEY!

WARNING: comes with shenanigans.

“Fannie Mae takes a delinquent mortgage loan and replaces the delinquent part with an unsecured loan in order to circumvent the buybacks and mark-to-market consequences.”

A loss mitigation tool (heh, I like that) that will defer the pain!

(I wonder if this ‘unsecured’ debt is going to be at credit card rates?)

The big sloppy Bernanke blowjob today is destined to be too little, too late. $200 billion ain’t nuthin’, when you’re staring at trillions- yes you read that correctly- of bad paper.

Sure the street was ecstatic, but given their herding instincts, it’ll take similar actions on a regular basis (twice to thrice weekly IME) to continually postpone fear. Once a few smart sheep figure it out, it’s over, and the fed will be forced to UP their game. I have no doubts Bernanke has the balls to devalue the dollar and take it all the way to zero as long as he gets to be right in his little academic experiment. Go Ben! Give it the old college try!

Of course, because foreclosure process takes so long, this is a way of extracting more money from the house-poor, just as banks do with potential short sales- taking forever to decide until they inevitably say no, by which time a prospective buyer has walked, and said bank has bagged a few more payments from homedebtor.

As you might expect of someone who hasn’t gone through the foreclosure process before, or isn’t up to snuff via the blogosphere, they would NOT realize they could live rent free as long as it takes- in some cases that’s as long- or longer- than a year. Hey, if you make a deal with the bank to to take care of the property, it might even pay relocation fees.

But wadda I know I’m just a numpty.

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“Your actions speak so loudly that I can’t hear what you’re saying.” -Ralph Waldo Emerson