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Fed Proposed To Become Next AIG
You thought the Fed had a lot of freedom? You ain't seen nothing yet. According to two MIT economists, Ricardo Caballero and Pablo Kurlat, the Fed should directly get into the credit default swap business to "prevent the next crisis." Says the WSJ:
Their proposal will be debated today at the Fed’s annual Jackson Hole, Wyo., symposium by the world’s leading central bankers and economists. Harvard’s Kenneth Rogoff, former chief International Monetary Fund economist, will present a critique.
Just in case you missed what destroyed AIG, and what, contrary to the current CEO's desire, will be the reason why AIG will be subsidized by taxpayers for centuries, is selling gluts of CDS on virtually anything that had any risk in it. But the MIT guys think next time around AIG should actually be the Fed:
The two professors say the underlying idea — selling insurance against extreme financial risk — should be in the Fed’s arsenal to manage financial crises.
“Insurance is an effective and cheap tool during a panic,” they say in their Jackson Hole paper. The Fed did provide an ad-hoc form of insurance during the crisis -– guarantees to Citigroup Inc. and Bank of America Corp. on the value of more than $400 billion in assets they held. More broadly, the Fed provided insurance to the whole financial system when officials there vowed to do “whatever it takes” to stabilize markets last fall and extended their safety net beyond banks to AIG. The professors say the bank guarantee program should be formalized in instruments called tradable insurance credits which could be triggered by banks and even hedge funds if another crisis erupts.
Alas, some red light aheads of this proposal are imminent:
There are some practical problems with the idea. The Fed was able to offer these guarantees to Bank of America and Citigroup using legal authority only allowed during “unusual and exigent” emergencies. To make ‘TICs’ a formal part of its toolkit, it would likely need congressional approval. That would likely be a tough sell with Congress now populated by many restive lawmakers who complain the Fed used its power too expansively during the crisis.
This may be a tough nut to crack as lately over 280 members of Congress have been pushing for limited the Fed's powers, not expanding it.
Yet most interesting, is that the Fed may have well already entered the CDS arena. Recent TIC data (not Tradable Insurance Credits, but the Treasury International Capital variety) indicate that beginning in March the Fed started getting involved in derivatives classified as "Other Contracts By Risk Type", to the tune of over $1.3 trillion dollars!
Perhaps before the Fed decides to wholeheartedly dominate CDS trading in addition to every other component of the financial system, the can clarify what exactly is the nature of these various "other" derivatives. Granted, while trillion is the new million, US taxpayers may be quite curious to know why since the start of QE the fed has been involved with not only Credit, but Equity and All Other types of this new form of derivative contract.
hat tip Dan
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haha
bail me out Skynet, in return you could enslave the future generations now, as of right now.
souls on sale, cheap, buy now they won't last for long.
I can't wait to see the June 2009 number.
Can you imagine? The Fed having a direct hand in narrowing CDS spreads across the board since March... and assuming massive exposure to both price risk and counterpary risk at the same time.
No need to worry, though... as with AIG, the Fed's contracts will be honored through the backing of the American people. It's a pretty cool thing to be a casino operator these days...
Watch how Iceland handles their central banks lost speculations. The Brits want the citizens of Iceland to cove the losses.
I think they vote on resolution tomorrow.
The real question is would the Fed stock get pumped 150% in 2 weeks? :)
Ricardo Caballero is the worst of the worst. He is an utterly right wing "economist" in full support of cleptocracies, in Latin America or the US.
These guys are kinda sad because they provide all the "intellectual" support for salaries and such that are ridiculously small when compared to the banksters and others they provide "intellectual" support to.
The economy should never be a right left thing. It should a-political. By the way, there are nuts on BOTH sides.
The American economy has been dominated by right wing theorists for the past 30 years. Economics is always political. Those on the left promote a strong middle class, those on the right promote a strong kleptocracy. This has been the case for several hundred years. Only the means by which the left or the right asserts power has changed over time. In modern America, our kleptocrats use the corporate structure to maximize control and minimize liability. The left had been working through unions, but this system did not proven as resilient for myriad reasons.
So the fed is the new AIG, and the taxpayer is the new shareholder in the fed, while the banks are the executives...
Someone please stop this train! I want to get off! (unless there's some way for the common investor to buy CDS's against the fed?
All your base are belong to us.
Clueless about the market, and no, he has never talked to an attractive woman without
good articles; my newest bookmarked finance site ..http://www..
hat tip: finance news & finance opinions
Yes, I understand who will be paying for the premiums in this proposal--those seeking insurance against sudden valuation discovery events. But, who is the underwriter? Hmmm.
It could be erroneous to conclude that, because someone outwardly exhibits behavior we may consider indicative of competence, they will behave in a manner which is responsible and moral.
And who will reinsure? Where can i get a piece of that?
Pretty whacky circle jerk these econo-jobs enjoy.
If the aliens don't come soon, humanity is going to fall of the earth and pollute the universe with stupidity.
40muleteam borax
Aliens? Ah, yes. MS-13, Mexican Mafia, etc. They're already here, and only adding to the pollution.
Audit the fucking Federal Reserve ASAP. This has gone far enough.
Equities show up in March.........Equity rally starts in what month????
Exactly my thoughts...there are no coincidences.
It's the credit, not equity side, that interests me. A huge narrowing in "high risk" CDS spreads can have a very acute influence on the behavior of the underlying equity.
And the Fed created a $ Trillion of exposure of them in a very short period of time.
Plunge protection, indeed.
fascinating . this is what happens when criminals take over.
When good men fail to restrain bad men, this is what happens.
Nanny Capitalism!...to coin a term
For decades we've been denigrating Euro socialism as creating "Nanny States" that coddle their citizens.
In a hypocritical move, our government decided to do some coddling, but not of citizens, just Wall Street. Not all of Wall Street, just "The right sort of people". Maybe that makes our system Crony-Nanny-Capitalism.
So, that would be Cronanny Magnanimity?
Jail for uncle Ben, shifty Paulsen and Turbo Timmy would be a start.
That's only $10k for every working American, which in a couple of years might just buy you a Quarter Pounder
Whoa, just imagine Mickey D's profits at that point! Yay, green shoot! BuyBuyBuy! (of course considering the cost side would be dealing with fundamental analysis, which by then will be strictly persecuted by the Goldman Inquisition)
Why insure the system when you can just subsidize any losses?
That would encourage more "risk-taking"!
Of course what would be the point of anyone owning Treasury Securities if you could get outsized returns with no risk?
So bonds sell off to near zero and now the Fed has to provide a new facility for AIG to buy Treasury Securities just to keep the whole casino open! Exiting!
But I read an article on the bloomberg terminal yesterday that AIG is going to pay back all tax payer bailout money!?!
I heard the same thing on MSM radio in my car (that AIG would 'repay' the stolen money). . . "Lies" , I thought to myself.
Not anymore! With us buying back those obligations at par (like we always do to help out a fellow billionaire in need) they'll be able to pay everything back with 1 week worth of profits! CEO's never lie to the masses (unless they have to)
Yeah, all $183 billion. In their best years, they earned 7-12 billion per. So if the Fed just backstops them and lets AIG write those CDS, they can repay the govt within 2 decades!
It is so amazing that the media will pass along the B@#$S@#$ that the propaganda press machines of these entities pump out! Last fall, right after winning the Lehman dying bet, and getting free money through AIG, Goldman Sachs was sending out releases that they didn't need the TARP money and that they would pay it back as soon as they would be allowed to do so--the big fat liars were bankrupt if it hadn't been for the smoothmoves of hank and ben passing money through AIG etc!!!!!
This article makes me feel like either i will cuss enough to get past this moment, or i am going to have a stroke! Our country is Gotham City!
Please read more carefully !!! See column 11 -- total of 12,13,14. This directly contradicts the conclusion that the Fed "started getting involved in derivatives" in March 2009. It is simply the detail in columns 12-14 that is missing for prior years
That's a brilliant proposal, an extension of the same thinking that had so many AAA companies using their low borrowing costs to loan their balance sheets to lower quality credits to jack up their earnings: Fannie, Freddie, AIG, MBIA, GE, etc.
Of course, the U.S. government is already doing this by taking over Fannie, Freddie, AIG, GM and propping up Citi and other major banks. What's the difference in this and writing credit default swaps? Let's do it!
There is no way in hell there going to pay back anything! Go back and re-read the article. He says they would like to pay back. Never does he say it's going to happen.
We need to disband the fucking Fed instead of giving it more power. We've gotten rid of 2 central banks in our history, time to make it a 3rd.
hear-hear!!!
More importantly, Citigroup traders are on crack today. Volume should hit the billion shares traded any minute.
TD, there is a new (???) claim regarding your identity.
http://www.nypost.com/seven/08212009/business/blogger_may_have_a_past_18...
not sure if you ve seen it; ZH free publicity is on the rise again!
p.s. "A man who answered the phone at Zerohedge declined to give his name or to comment. He offered vague statements like, "Zerohedge is not one person," and, "For us, its not about the messenger, its about the message."
they envy you !!! so guys you must be doing something right.
Nice to finally know who you are Daniel.
The coward Gasparino crowed today.
They think they can attack a person now and thus discredit the message.
They are wrong.
Is it just me or is the NY post trying to direct Zero Hedge readers to check out other "finacial news" sources. If so I wonder why? That is some seriously free advertising.
Daniel Ivandjiiski has an affinity for parentheses whereas TD does not. Nuff said. Besides, I know for a FACT TD is really Pauly Shore.
The brilliant news reporters gifted at penetrating the structure of all things and understanding thier underlying what it means. The analyst of anus cysts get told what zero hedge is and declare that it "May have a past".
:))
oh, about that; forgot to tell you guys; i took TD bloomberg and Max Keiser interview to my friend who has a Ph.D in phonology to give me his thoughts. I wont tell you what he told me, but i will tell you this; TD is CERTAINLY not of Slavic or romanic heritige. The rest, i will keep a secret.
C'mon, that's clearly the accent of someone from Russia, the Ukraine or somewhere in the region, probably a guy who came to the US as a young teenager (earlier, there would be no accent, later, a thicker one) -- there are tons of these guys in NYC, many of whom are very geeky and have a great work ethic.
That said, I don't care who TD is, and I certainly don't care if he was railroaded out of the industry over 800 bucks -- what a joke when billions are stolen every day in plain sight.
Canadian exposure is my guess, definitely loves Rosie.
well, is not this peachy? so all this time we are reading notes from a person who was insider trader? thats funny
about high speed trading:
http://www-cse.ucsd.edu/~snoeren/papers/lda-sigcomm09.pdf (pdf)
http://www.physorg.com/news169997201.html
Computer scientists have developed an inexpensive solution for diagnosing networking delays in data center networks as short as tens of millionths of seconds -- delays that can lead to multi-million dollar losses for investment banks running automatic stock trading systems. Similar delays can delay parallel processing in high performance cluster computing applications run by Fortune 500 companies and universities. University of California, San Diego, and Purdue University computer scientists presented this work on August 20, 2009, at SIGCOMM, the premier networking conference. Credit: UC San Diego / Purdue University
Fed, treasury and GS all engineered a massive bailout of economy to make sure we don't go to hell in a jiffy. They want to keep everything high so that banks can earn/steal/con enough money to offset the loan loss which is still occuring. If they succeed, great. if they fail, which is a pretty distinct possibility, the real feces will hit the fan in a massive way. that's the scary part. so far it is going well, until it isn't.
We are now at level 2 total takeover.
It sounds as if they are proposing the fed becomes a type of FDIC but with a cap and trade like twist: "a bank guarantee program should be formalized in instruments called tradable insurance credits which could be triggered by banks and even hedge funds if another crisis erupts.". If those become mandatory and they control the pricing of the insurance they can put every bank that is not their friend out of business.
First off, it's not just "insurance" since these assholes are writing lottery ticket agreements between themselves that hedge NO underlying risks and they manage their earnings through these vehicles. Many of these are lottery tickets, not risk management "insurance" vehicles - a good analogy is having multiple insurance policies on a house and then burning it down to collect the insurance proceeds X5.
Non-regulation of derivatives including CDS will go down in history as the biggest control failure in the history of the world - perhaps a planned destruction. I understand their problem, they wrote more CDS than any entity could ever backstop including the fed - so they need to move the risk to an entity that will never be audited. So it is just the junkyard side of the accounting double entry supported by your tax dollars to stabilize systemic risk (lotteries).
We need to immediately cease writing new CDS (make it illegal until further notice), set up standardized CDS contracts with set triggers (bankruptcy or debt restructuring or ratings downgrade (hah!), maximum limit payout based on the amount of exposure the buyer of the CDS has in terms of receivables or exposure (if your house is worth 300,000 you shouldn't be able to insure it for 2 mil and burn it down), they should not be collateralized or sold on to any third parties, the total CDS on one company should not exceed the total counter party risk of that company (if there is a company with $1m debt we should not have 500 insurance contracts sold for $1m), collateral needs to be deposited, and it needs to be traded on a fully visible exchange outlining the type of contract, $ amount, trigger basis type, trigger absolute figure, entity being insured against (no lottery), and owner for each transaction.
too reasonable
Move CDS contracts onto a public exchange where the bid/ask are readily available and is marked to margin ever night and we could get rid of about 95% of the CDS problems right away.
Great, great post... Mr. Brando. Scrap the current CDS market structure and start from Step One.
And the Fed has no business doing these transactions, btw.
agreed 100%
Did we just hit a new intermediate bear market top? Yup I think we did.
Good Lord there must be something TERRIBLE planned soon. The sucker-dupes are being set up for searing financial pain. What could the 'external event' be? There are so many to choose from!
Today, we see the list is probably topped out by the following:
1) Russian FSB conducting 'radiation tests' on their stolen ship.
2) Georgian nutcase Saakashvili initiates naval blockade of breakaway province Abkhazia.
3) Fake flu might get some new gene segments
4) Today's UN inspection of the main Iranian nuclear facility may result in unpleasant yet contrived conclusions on the international scene.
5) Coming up on Tuesday Aug 25, the FDIC reports that it's been tapping Treasury for the $100 billion line of emergency credit. aka FDIC is insolvent! So is Treasury for that matter.
Take your bets, soemthign is about to hit the rotating blades!
intermediate bear market top? Yup I think we did
-----------------
in your dremas Mayhem, in your dreams
Weird day all around in the equity markets.
We were DOWN 50 basis points in the overnight.
Then we get a pre-opening ramp job based on BB comments, that essentially, all is well in the world thanks to his best efforts (and by the way, I'm sure he's not campaigning for his upcoming re-nomiation).
So the ramp occurs... and look where we're heading again? It's the VWAP reversion theme all the way into the close.
It reminds me of the movie, "Groundhog Day".
Agreed, something smells really rotten
Per Charlie @ CNBS, ZH, you are an Anti-Semite, which is why you hate Goldman, well not just you, anyone who is angry at Goldman is an Anti-Semite...wow...
ahaha yeah opposition to crime and corruption is anti-Semitic lol
CNBC u fail
No, in reality this blog is anti-crook while the finance and media establishment is clearly anti-non-semite judging by leadership roles and under-representation of other groups. If the names on wallstreet were Italian, the government would call it racketeering and take down the mob. It is tough to play the victim card when they run the show including key government positions. It's just another example of an ad-hominem attack because they can't counter the blog posts. No subject should be taboo or off limits to discuss if you are a true intellectual, however some individuals will shrink at the mention of this word.
News flash - all Christians, Jews, Muslims, Atheists, African-Americans, Hispanics, or Whites are not 100% good or 100% bad.
I really want the people on this blog to understand this, because like Goldman Sachs 97% trading success, how could 1.7% of the population be running most of finance and the media in this country including key government and fed roles almost exclusively. Is this not discrimination?, could a small group be colluding together? would it matter to you if it was a group of Chinese, Roman-Catholic, African-Americans or some other group? Is that fair and equitable? Might a small group of people have a friend that owns a printing press that can fund, support, and favor their enterprises?
Watch the movie inglourious basterds - it's a Jewish revenge movie and I think they are finally exacting their revenge in Switzerland with bank accounts, Karma if you know your history. However, as the saying goes, Two wrongs don't make a right - so if someone steals from us we don't care what background they have and they should have no protection as a "protected" group. Pitchforks should be equal opportunity and should apply the same for Madoff as well as Kenneth Lay or Bernie Ebbers.
We are anti-crook and anti-favoritism - that can be applied to selling NJ organs or ponzi schemes like Madoff. Madoff used that same excuse with the SEC to rebuff investigations into his ponzi scheme - "it's an anti-semitic smear". Weak people with weak arguments hide behind a victim shield and don't address the topics. Opportunity and punishment should be equal regardless of affiliation. In the art of war, it is said when strong act weak and this is what the defense league and accusations of defamation are all about.
This would be the equivalent of Potter from it's a wonderful life stating Bailey's savings and loan bank was discriminating against old men (of which he was one) because Bailey refused to be bankrupted by him.
I hope people understand I am pro-Israel the state but anti-monopoly.
It is just beyond belief that they would try to pull that stunt!
However it would be accurate to say that anyone criticizing anyone who criticizes the "hate Goldman" movement, is just anti-intellectual ( or against using your intelligence or simply has no intelligence to use) . But, it is just a waste of time and a distraction to sit around and try to label the shill idiots that way.
CNBC is slamming Zero yet again. And, THIS is why anonymity is important. They are bound and determined to smash the "person" and totally ignore the "message." wow
i can't believe CNBC feels the need to talk about TD or Daniel
unreal!!!!!!!!!!!!
When is zerohedge going to expose the CNBC fraud Pump and DUMP? its war!
Fantastic. CNBC directing traffic to ZH. Yes, they're that stupid.
CNBC is worthless. back to regular programming
I couldn't agree more Apocalypse Now. It's the biggest scam and will eventually take down the system one way or another.
TD...i just heard charlie gasbagarino talking about you on cnbc and smth about you haveing a past...
i think it was an article about you in the newyorkpost. maybe i heard it wrong.
the article is useless. it really doesnt say much at all.
http://www.nypost.com/seven/08212009/business/blogger_may_have_a_past_185653.htm
except that traffic is way up compared to other blogs
so yo usay
good articles; my newest bookmarked finance site ..http://www..
hat tip: finance news & finance opinions
thx for the link :))
Daniel Ivandjiiski.
is that russian?
were u really barred by FINRA last year for insider trading?
Who gives a damn? Does it make anyone feel safer that FINRA is wasting its time over 800 dollars, with all of the trillion dollar scams out there?
1) Russian FSB conducting 'radiation tests' on their stolen ship.
Russian ship was reportedly caryring lumber but was in port before sailing for a few weeks. Stpry is strange all around
MOSCOW (Reuters) - The hijackers of a cargo ship that disappeared off the coast of France threatened to blow it up if their ransom demands were not met, Russian news agencies said on Wednesday.
Russia on Tuesday arrested eight people on suspicion of hijacking the Arctic Sea off the Swedish coast and sailing it to the Atlantic Ocean, ending weeks of silence about the fate of a ship which has intrigued European maritime authorities.
Limited information from Russian officials has failed to satisfy skeptics who voiced doubts about whether the piracy actually took place or was a convenient cover story to conceal a possible secret cargo of arms or nuclear material.
http://www.nytimes.com/reuters/2009/08/19/world/international-us-ship-ru...
Chuck the F*** is an idiot. Jews hate Goldman also.
And the one bald guy tried to point out that MSM types get shit wrong all the time. Tits Cabrera interrupted him to go to commercial.
And Daniel, if you're out there, what I read said you made a whopping 800 dollars from insider trading. That's a big freakin deal in the scheme of things isn't it? What a joke this country is.
I too feel sorry for DI; it seems at worst to be a foolish or thoughtless mistake; possibly even an honest one. Also; what are the chances/reasons for such a trivial transaction to be brought to FINRA's attention, eh?
http://www.finra.org/web/groups/industry/@ip/@enf/@da/documents/disciplinaryactions/p117220.pdf
Please check out page 2 of the report:
Bernard L.Madoff Investment Securities LLC (CRD #2625, NewYork, NewYork)
submitted a Letter of Acceptance,Waiver and Consent in which the firmwas censured
and fined $25,000.Without admitting or denying the findings, the firmconsented to
the described sanctions and to the entry of findings that it failed to report accurate
trading information through the submission of electronic blue sheets in response to
FINRA requests for such information. The findings stated that the firmfailed to include
the short sale indicator for electronic blue sheets records. (FINRA Case
#2005002508102)
It's good to know the vigilant regulatory body is really keeping its eye on the ball, evildoers shaking in their boots, and the American investing public safe and secure...
Tyler,
Just on CNBC, they are showing an article from NYpost appreard today.
http://www.nypost.com/seven/08212009/business/blogger_may_have_a_past_18...
Any comments?
Could this be Bernanke's version of what he proposed to Japan to do in order to stop deflation in the beginning of this decade? He told them that they did not have to specifically create inflation, but rather just make a clear inflation target and have the market believe that they are going to do anything possible to reach it, which then becomes a self-fulfilling prophecy.
The inflationary threat of a proposal that could potentially monetize credit default risk could maybe be the reaction he would want from talks like this. At least that would be my hope, as even the most criminal mind would not dare go through with a plan like this unless they really knew that no one was left holding any cards...
Fuck CNBC.
As with all gambles, I believe the term is deliver or go to jail.
Adrian Burridge
CanadianInvestors.com
From "Free to Choose":
It takes time for (inflation) to occur. On the average over the past century and more in the US, UK, and some other Western Countries, roughly 6 to 9 months have elapsed before increased monetary growth has worked its way through the economy and produced increased economic growth and employment. Another 12 to 18 months have elapsed before the increased monetary growth has affected the price level appreciably and inflation has occurred or speeded up...
The sequence of events that follows a slowing of monetary growth is the same as that just outlined except in the opposite direction...
Well..."Tyler" is NOT responding to this and this should raise concern!
His interview with Max last week should have raised cocerns!
Folks , I am actually Tyler Durden. Tonight we make soap.
Just make sure the soap production gets counted in next month's GDP report so we'd have another green shoot to add 10% to equities!
Wow, this Daniel guy barred for life for over $700 in profit, yet Blanky sits in on AIG talks with FED and Treasury. Are u kidding me? How about some fucking perspective. Cabrerra you are pathetic and Charlie you now suck as well.
I don't give a shit if Tyler molests collies, what in his message concerning the day to day bullshit is wrong?
There is already such form of insurance: it is called
placing your ex-ceo at the head of the treasury.
I'm experiencing this traumatic flashback to the Derivatives Policy Group's "Framework for Voluntary Oversight" (oversight of derivatives market, that is).
Of course, the DPG was composed of Goldman Sachs, Morgan Stanley, CS First Boston, Merrill Lynch, Saloman Bros. and Lehman Bros.
Fed selling "insurance" against "extreme financial risk" is just a transparent means for avoiding charges of moral hazard. If the Fed bails you out, they're not bailing you out, you're merely collecting on your "insurance". See?
Most resorts even as they cater to the super rich and famous have as much a following of what once was merely described as ski bums or as colorfully "locals." Ski bums would always take favor to being a local over a ski bum, as most would do anything or sleep in such a manner to that of always wanting to be there. A certain passage of freedom though mostly undefined as the arrangement in lifestyle that mountain resort living offers.
As such the ski pass is worth more than money can buy or one can afford. The pass is the ticket that rewards all for taking the daring plunge that the "deep and steep" offer. At its essence is ones soul of finding, pushing, and stressing the limits from that which all of life has given or has as yet to offer. The ticket is the trusted soul mate unknown to plunder deeper within the boundless powder days to make last longer what eventually must come to end.
At least with anonymity one might pontificate a variation on this years Jackson Hole theme of saving the world. Although, for a destination resort I doubt any resort will ever trump what Jackson Hole has now become, with exception to the first conference of the IMF at Bretton Woods NH.
Welcome to Jackson Hole, Wyoming -- We Save the World
Ben Bernanke will show you how to kick ass.
Hmm. Interesting.
Once upon a time, MIT guys were supposed to be smart.
Ummm, educate me on what TIC (Treasury International Capital System) has got to do with the Fed going into (or already buying) CDS. I thought TIC is about the U.S. financial transactions as an aggregate with foreign entities, and not about the Federal Reserve.
It is. You are correct. ZH is wrong.
Thanks for asking this question.
It took me 10 minutes of googleing to find the report TD used to jump to his conclusion.
You can find it here:
http://www.treas.gov/tic/ticderiv.shtml
This report does not describe FRBs CDS exposure. What it does describe is clearly described on the link.
just curious TD..oops..DI
what was your 'inside' trade that made u soooooo much money. i hope FNRA made u donate at least $400 of that trade to your favorite charity and have to do at least 15 minutes of community service. no one should be allowed to make such insane profits off of insider info. you and martha stewart make me sick. lol...jk ofc
was gonna say something bad about NC, but they're probably getting some good surf
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
why does the market keep going up even though the fundamentals aren't that great? Every day, week, month the market keeps going higher.
Why not they are already manipulating everything else. Ben is A flippin fool! Where are they all going to hide?
http://www.globalresearch.ca/index.php?context=va&aid=14625
Ther is no such entity as " crony capitalism". Call it by its proper name: communism. Government giving free taxpayor monies to its allies. What else would you expect?
So to summarize:
- OTC casino has open bets summing to ~$1 quadrillion
- Losers of big bets can't pay (AIG, Fannie, Freddie) and risk default
- Default causes a cascade in a gambling ring bringing the whole thing down
- Fed acquires positions from defaulters
- Fed pays out on losing bets using freshly printed QE cash
- Receivers of QE cash are typically investment banks, notably GS
- Receivers need something to do with the cash -> stock purchases
- QE causes targeted inflation of equity markets
- The global derivatives market *was* a zero-sum game, but when the Fed joins the party, in comes a fresh stream of money and we have inflation
- Mediocritas