Fed Will Now Monetize The Most Recently Issued Agencies
The Federal Reserve announced earlier a shift in its strategy in purchasing Agency debt, whereby it would purchase almost exclusively the most recently issued Agency paper:
Prior to August 31, 2009, purchases were focused on off-the-run securities in that category. Going forward, purchases will include on-the-run securities in that category. This change represents a technical adjustment designed to mitigate market dislocations and to promote overall market functioning. Over the course of the program, the Federal Reserve may change the scope of purchasable securities.
"Overall market function" is a wonderful euphemism for attaining a sufficiently high stock price for commercial banks so that when the FASB requires off-balance sheet items to be reincorporated on their respective balance sheets at the end of the year, we don't have another massive bank raid once every single emperor's clothes are proven to be non existent as Tier 1 Capital Ratios start collapsing like dominoes, and the Stress test is determined to be a government sponsored fraud.
John Jansen provides the following expansive explanation:
“…That approach had several consequences. It made the agency market less liquid as the Open Market Desk soaked up off the run paper and owned increasingly large pieces of those issues. Dealers would be quite hesitant to offer bonds to clients as covering the short position would be hazardous to a traders health.
So by shifting focus to recently issued bonds the Desk will be able to procure bigger blocks of bonds without further disrupting already damaged liquidity.
In addition, in my experience the Federal Reserve has always bought that which is cheap on a yield to maturity basis. There purchase activity has made off the run paper expensive to on the run paper and this new procedure will allow the Desk to buy that which is cheap on the curve…”
Zero Hedge has a simpler one: monetization (and after all the Fed is already doing this with Treasuries; did anyone think that Agencies, which as TIC showed recently, are being shunned by all CBs are any different - it was only a matter of time before the Fed tipped its hand in "advising" foreign purchasers that it will now backstop virtually every piece of US-issued paper, even those from the dreaded GSEs).
And lest we forget, the Fed is already facilitating the rotation of MBS and Agencies by foreign CBs into Treasuries. At this rate a $5 trillion Federal Reserve balance sheet by this time next year is looking conservative.
(30 votes)
on Tue, 09/01/2009 - 17:57
#55577
By hook or by crook, they will not give up the manipulation.
on Tue, 09/01/2009 - 18:07
#55594
More like CAN NOT give up the manipulation.
on Tue, 09/01/2009 - 18:33
#55612
This will be THE CURRENCY CRISIS OF 2010....As I have been saying for a month now the FED will by all the Agency Paper from every garbage real estate venture in the past decade.
I suspect they would not have been this obvious...I thought maybe they might buy the level 3 assets directly from the banks and then the banks would be good to go....perhaps this is why the banks are getting bid up because the VAMPIRE squid knows what "THE PLAN" is in Washington. Dollars to donuts that is the game plan. Why else would PAULSON and the gang load the boat on BOFA et all? This is the only rational explaination that I can come up with ....the insiders who control everything know what the game plan is...but not us minions.
on Tue, 09/01/2009 - 18:53
#55642
Beware.... The Fed did the same thing to Irving Fisher, the creator of the econometric methods of the Federal Reserve... And then he died broke, penniless and discraced.... despite the fact he created our entire economic system which they thoroughly subverted. What makes you think they will have any better regard for Paulson?
http://www.dallasfed.org/research/ei/ei0501.pdf
on Tue, 09/01/2009 - 19:39
#55665
Paulson the hedge fund manager....the guy who has one of his largest positions in Gold and added BAC to his portfolio
on Tue, 09/01/2009 - 23:08
#55844
What good is gold if the zombies are scarfin on your brains for breakfast.
Too many zombies, too little bullets.
on Tue, 09/01/2009 - 19:57
#55683
Keyser I definitely agree. I'm not sure BofA stock will be worth anything, but his gold definitely will.
In terms of Fed owning all the agency paper, I think this is the game plan. Actually I see two game plans.
PLAN A: What you said. Fed balance sheet grows like cancer to swallow up GSE and possibly Treasury debt.
PLAN B: Fed implodes in controlled demolition -- authority is handed over to the IMF to 'rescue' the system.
on Tue, 09/01/2009 - 20:15
#55697
The Fed will pick up all the garbage...once it started down this road it can't simply stop...he is like a drug addict, nothing can ever fail again that is the new administrations policy.
The problem though is that it will cause a race to the door to sell dollars assets, bonds, treasuries, currencies. I don't believe the USD will catch a REAL bid if the equity markets sell off. The invisible hand will come in and jam the USD shorts...Ben HAS TO KEEP THE DOLLAR UP. He can't let the USD collapse or forget even trying to sell a UST, note, bond even at 10%-20% if your currency is effectively worthless and Ben knows this...look at the DXY...will not go down period.
AFTER the US currency collapse (and all other countries who have all printed money to keep the game going) will all approach the IMF with a reset formula. I believe it will be a debt swap formula. How? I am still thinking but some kind of forgiveness/minimizing of debt, perhaps some ideas from readers. The US will have way to much debt by that time with the with SS/medicare right behind all of this .......and the debt has to implode and it MUST be deflated...we are past the point that we can inflate out of this thing. Mathmatically impossible (of course I am adding in the CRE collapse onto the Feds balance sheet as well)
on Tue, 09/01/2009 - 20:29
#55708
My theory: it is either massive liquidation or war at this point. The time for reasonable negotiation has passed. Maybe the IMF will come in and make everyone happy but that seems unlikely to me, they just don't have the funds or the clout to implement a "solution" what ever it can be. SDR's are great (not really) but they need to grow very rapidly to a significant percentage of central bank reserves and even then it is just another way to leverage something that shouldnt be leveraged.
on Tue, 09/01/2009 - 21:12
#55752
Just because they shouldn't doesn't mean they won't.
You've heard of KaPoom theory, my take on it involves conspiracy and more extreme measures, I call it SuperNova theory, perhaps in part because six hedge funds in NoVA are involved integrally. When money can be typed into existence, deflation ends up manifesting itself in the end-game as hyperinflation, though perhaps not nominally.
on Tue, 09/01/2009 - 22:18
#55805
Agreed. Supernova sounds like an apt comparison.
on Tue, 09/01/2009 - 23:06
#55841
first massive deflation, then hyperinflation--the worst of both worlds.
on Tue, 09/01/2009 - 21:20
#55755
Did you see what the IMF did last week with the SDR and 5 of the worlds central banks?
on Tue, 09/01/2009 - 22:19
#55806
TumblingDice I agree with you as well. I think they will start a war in Pakistan to be perfectly honest.
on Tue, 09/01/2009 - 23:00
#55840
Also keep an eye on Equatorial Guinea. Huge oil reserves which are desired by all, including China.
on Tue, 09/01/2009 - 23:07
#55842
Look further south. Venezuela. Building 5 bases in Columbia as we speak. They Ben settin up that one for years.
But, could be right about Pakistan, maybe that's why China pulled out of Gwadar.
Hell, why not multiple wars all over the planet.
on Tue, 09/01/2009 - 23:19
#55851
War consume it doesn't produce.
on Wed, 09/02/2009 - 07:42
#55955
Google V2 rocket wiseguy.
on Tue, 09/01/2009 - 23:46
#55858
Don't forget Iran. For the past two weeks, the U.S. newswire services have been running articles about the hijacked Russian ship. These articles accuse the Russians of attempting to ship missles to Iran.
Since we have troops in Iraq, Afghanistan, the waters of the Persian Gulf, and now Pakistan, we have unoffically surrounded Iran on four sides -- something that's absolutely necessary in a full-scale invasion.
I see the scenario playing out as follows:
1. A false flag attack takes place in the U.S., and
the stock market collapses.
2. The U.S. attacks Iran.
3. Iran blocks the Strait of Hormuz, cutting off all shipments.
4. Oil skyrockets to $300 per barrel.
5. Bernanke says, "Don't blame me for the stock market crash.
The Iranians did it."
on Wed, 09/02/2009 - 03:46
#55916
this is a reasonable scenario however the action
is in syria...it will be demolished before any
action on iran...and in fact may be bait...
on Wed, 09/02/2009 - 11:28
#56223
That's possible. Syria is a possible kick-off place.
on Wed, 09/02/2009 - 08:39
#55987
What has been learnt successful will be repeated!
on Wed, 09/02/2009 - 09:53
#56060
1. A false flag attack takes place in the U.S., and
the stock market collapses.
Replace with "U.S." with Israel and the rest is about right.
on Wed, 09/02/2009 - 10:46
#56168
US = Israel = US ...
You can often replace Israel with US, or
"US backed Israeli" in news reports and
they read accurately.
on Tue, 09/01/2009 - 20:29
#55710
I think Bernanke will be shot some hot tempered dude and Ben will be sipping beer in hell and watching US from there..
on Tue, 09/01/2009 - 20:41
#55718
Some type of forgiveness...hmmm.
Well they could just let Beijing walk ashore on Taiwan without lifting a finger. How much would that be worth to China?
on Tue, 09/01/2009 - 22:18
#55804
Keyser you really should write an article
on Tue, 09/01/2009 - 20:58
#55736
I agree that the U.S. getting "Structural Adjustment" from the IMF just like the third world toilet we have become is a strong possibility, but I'm not sure it's as premeditated as you seem to think it might be. I could be wrong, and in the end there is no telling for sure until some historian writes a book 50 years from now based on the personal letters of the people most centrally involved in this who will have just died.
Either way, kiss the world's only Superpower bye-bye. Either SDR's or Euros become the new reserve currency, petrodollar recycling ends and takes our overinflated stock market with it, the Pax Americana fades, The Sunnis and Shiites sack Tel Aviv and then fight amongst themselves over Jerusalem, and the PRC settles the "One China" question once and for all with military force against Taiwan.
And I move to Canada lolz!!!
MORE BLOOD!!! MORE BLOOD!!! MORE BLOOD!!!
on Wed, 09/02/2009 - 10:28
#56129
On your list of ground zero falling hot spots from the “over-inflated stock market” to “Taiwan,” I wouldn’t have included “Tel Aviv” since it represents the Middle East’s major superpower armed to the teeth by American taxpayers.
Stalin said of the Pope: “How many divisions does he have?” Sunnis, Shiites and Persians? How many nukes do they have?
on Wed, 09/02/2009 - 10:59
#56180
Israel has over 450 nukes and they possess the nuclear troika, missiles, planes and subs.
on Wed, 09/02/2009 - 19:45
#56956
I dunno, how many nukes did Russia "lose" over the last couple of decades? How many of them could have been bought with Arab state oil money? Quite a few. In any case, the Rumble in the Desert will be quite a thing to watch, from a distance.
on Tue, 09/01/2009 - 21:29
#55765
plan b is the solution....
how many noticed that the imf issued in 250b
in "liquidity" last month via sdr - the first
time ever of that magnitude....
the four horsemen of the apocalypse gallop
harder and harder...
just as nanothermite brought the wtc down in a
controlled demolition, so will debt and derivatives
do to the fed....
nothing happens by accident....
on Tue, 09/01/2009 - 22:21
#55807
No I didn't notice that. Where are you getting the statistics on the growth of the IMF SDR? This is a critical story in my opinion.
on Wed, 09/02/2009 - 00:29
#55871
http://www.kitco.com/ind/Nathan/aug312009.html
paul nathan is the author...he said it was
unprecedented....
and you are absolutely right that it is important
because it is a prelude to supranational
and nwo type amalgamation of the world's money
supply and management...
the final act is unfolding right before our eyes....
this is about the 3d time i have read this information
on Tue, 09/01/2009 - 22:45
#55828
That is exactly what I was referring to in my post above...slipped 'under the radar'...but remember the SDR is just for the CB banks. (not for the minions)
on Tue, 09/01/2009 - 21:47
#55780
The IMF doesn't have the horsepower to bail anyone out of this, at least not with real capital. There will be a gentlemen's agreement among the ruling classes worldwide to debase currencies somewhat equally, and lower the living standards of all the serfs everywhere. There is no other way out that retains the ruling class, so that is what they will try to do.
What we're doing right now is consolidating economic power into fewer hands, especially banks. The serfs are being heaped with sovereign debt to provide cash so that the big banks can survive and buy up the little banks. When this consolidation is complete, the agreement will be implemented via global "austerity" measures whereby all the promises that have been made to retirees will be reneged on via inflation. Costs of living will rise but wages will not. The middle class gets destroyed, and the chasm between the rich and poor widens dramatically.
Corruption will become commonplace and open. Protests will be dealt with harshly; excuses will not be found wanting. Argentina, except with a police state.
on Tue, 09/01/2009 - 22:13
#55802
Well said.
The ONLY thing you can do, the ONLY way you can save the country, is to starve the beast immediately.
on Tue, 09/01/2009 - 22:21
#55808
Man there is some great intellectual content on this thread I am impressed heheh. I have to read this carefully when I get back home.
on Tue, 09/01/2009 - 22:42
#55825
The problem with "New World Order" conspiracy theories like this is that they deny not only present political realities, but historical precedents as well.
Yes, the Council on Foreign Relations puts forward lots of baroque schemes for world government. Half of them never come off because they can't get the parties involved to cease squabbling over old issues. The CFR is in reality an arm of the Anglo-American Empire and as such everything they publish and all of the backdoor deals they make are oriented towards that end.
But, look at it objectively: all of the parties that the US is counting on to fund the Empire have much to gain and nothing to lose from a US collapse. OPEC nations? Their biggest goal in life, the Arab ones at any rate, is to burn Israel to the ground and solidify the Middle East as a Pan-Islamic Union of some sort. Their only stumbling block? The United States. China wants to become a true regional power in East Asia, dominating the area both economically and militarily. They want to clean the Nationalists out of Taiwan once and for all. Who is stopping them? The United States. The European Union would like nothing better than to have their currency as the next world reserve currency, just like the Dollar is now and the British Pound used to be. And the IMF would LOVE to be the primary issuers of SDR's for a true "World Bank", assuming they could get everybody to agree to it: good luck there, they can't even get the diplos at the UN to agree on what's for lunch most of the time let alone getting the whole world to abandon their national currencies.
I see not world-wide political unity out of the present crises (plural form intended), but global fragmentation based on already well established regional lines and long-standing grievances and prejudices. This is nothing more or less than everyone's opportunity to eliminate the world's policeman (the US) once and for all and get down to the business of settling their old scores at last. And honestly, world political unity is just too optimistic an outcome at this point in history and with all the old grievances that are still in play. I firmly believe that anyone who thinks there is one unified class of "The Rich" that are going to enact global control is just giving these people too much credit. Yes, there are some in that strata who would like that and yes, many of those are high-level bankers. But I think those bankers will be very disappointed by what happens next on the global stage.
on Wed, 09/02/2009 - 07:45
#55956
What you say is correct, IF you believe that the relevant governing entities believe they can survive a severe downturn independently and stay in control of their own local spheres of influence.
I have my doubts. Of all the areas you mention, China appears to be the most capable (and certainly willing) to deal ruthlessly, forecully and immediately with any internal problems arising from joblessness, hopelessness, etc. China can certainly deal with Taiwan, but can it deal with the U.S. Navy? Nope. Why not? Submarines. China cannot defend its lines of trade; this is not a good position for a mercantilist nation.
The EU is a freaking economic basket case that is totally dependent on a mortal enemy for energy; the Euro is a dead issue. The House of Saud would love to destroy Israel, but with what? Iran? The only thing the Saudis hate more than the Jews is Iran, and the thought of a nuclear-capable dominant Iranian state in the ME is terrifying to them.
The IMF has no large supply of real capital; the IMF was designed as a tool for looting small nations of their natural wealth; it is totally inadequate to the task of issuing a world currency. SDR's are a basket of sovereign currencies, and as such printing SDR's is the equivalent of printing sovereign currencies. Printing unbacked currencies by the basket is no better than printing unbacked sovereign currencies except for the added layer of obfuscation. It's still not real capital.
The world bankers fear loss of control more than anything. I expect them to attempt a coordinated, rather than competitive, debasement of currencies. I expect it to work for awhile and then blow up.
on Wed, 09/02/2009 - 11:23
#56216
Sorry... hedge fund for you too!
on Wed, 09/02/2009 - 19:52
#56965
Just remember, we DON'T KNOW what the nuclear capability of Arab oil states is like. We have an IDEA that most of them aren't close to producing their own weapons, however this says nothing about them having been able to buy up loose Russian nukes. Not6 to mention possible sales of Pakistani nukes.
And what happens to Isreal if they actually USE their nukes? Hard to say. We don't THINK Pakistan has the missile range to hit them, but load one good city buster onto a semi truck...
on Wed, 09/02/2009 - 10:33
#56142
You MUST start a hedge fund.
on Wed, 09/02/2009 - 11:28
#56225
Brilliant insight... both!
on Wed, 09/02/2009 - 07:33
#55951
this seems the likely scenario, though I can't quite get my arms around the extent of middle-class destruction that will occur.
however, obama's policies seem intent on leveling the playing field between the poor and the middle-class, including anyone who happens to have 2 feet on the ground in the US.
in addition, his policies seem suppressive with regard to freedom of speech (control of the internet in extraordinary circusstances in no different than some dictator taking control of the TV and radio stations).
and a couple other things meant to keep a disgruntled populace in place are on the horizon.
on Wed, 09/02/2009 - 00:09
#55864
I keep hearing all this talk of "The Fed" buying this and that and owning toxic assets, etc. in a bid to "save" the economy. What they are doing is spending OUR money as taxpayers in order to "save" a few large financial institutions. The ones holding the bag won't be Paulson but you and me. It's really gonna suck for America at some point.
on Tue, 09/01/2009 - 20:44
#55723
Reading Zero Hedge these past months and watching the antics of the Plunge Protection Team through the eyes of ZH contributors, I've come to the inevitable conclusion that the political leadership of the United States (and that includes the corporations, tis is a Fascist government after all) is in a deep state of psychological denial due to severe psychic shock at their subconscious realization that their elite status is about to end, both as a nation and, more importantly for them, as individuals. This is the only thing that even remotely makes any sense out of the moves coming from Washington and New York these days.
The plan is simple: monetize debt as fast as they can by buying their own Treasuries with this agency swap shell game, use the Plunge Protection Team's access to HFT algos to immediately dump all that money into Fannie, Freddy, Citi, CIT and AIG to create the impression of a "new bull market", get the cheerleaders at CNBC to treat any and all bears the same way the mainstream media treats flying saucer witnesses (actually worse than that, considering that what Peter Schiff says is actually rooted in provable reality), and hope the Chinese don't notice this.
And it's that last part that convinces me they're in denial. In other words, it's not just that they're lying to us. They're lying to THEMSELVES about this strategy having any hope whatsoever of working. I mean, come on: if ZH readers and contributors can see through this bullshit so easily, don't they think the Chinese can as well? Not to mention every other country now holding our worthless paper? It's not as if these countries don't have their own ways of knowing things, their own well developed economic intelligence departments. This foolishness is decieving nobody except American citizens, but it's not the AmCits who need to be conned into believing in this, it's our foreign creditors.
What a world. I actually took a break from my blog for the last few days because I was just flabberghasted by the bullshit coming from all sides these days. Look at the "health care" mayhem: those people, both sides, are like Hitler in the Bunker in April of 1945, pushing around units that don't even exist anymore. I'm convinced for my own reasons that universal health care can work, it DOES work in most of Europe and Canada and I am well aware of the lies perpetuated by insurance companies to the contrary, but that having been said, a Dollar collapse renders the point moot. Insurance companies ARE spending buku bucks to maintain their legal monopolies over the health system. This is truth. But again, once the commercial real estate market blows up and a whole bunch of other things start to sink in it won't matter. They can make all the hyperinflated Dollars they want from human suffering, they still won't be able to buy anything with them.
I'm with Project Mayhem: I'm also diversifying into canned food and ammunition lolz!!! Actually, if you've read my website then you know this is the literal truth. The central economic planners in the Soviet Union didn't see their demise coming any more than our central economic planners at the Fed see theirs coming.
And I say: MORE BLOOD!!! MORE BLOOD!!! MORE BLOOD!!!
on Tue, 09/01/2009 - 21:39
#55776
i think you have drawn the right conclusion
about the fascist elite who rule this nation...
but i would add that not only do they themselves
see collapse, they are looting us on their way
out the door....the top 1% of americans
own 57% of the nation's wealth....
the ultimatum they gave congress last year in
terms of forking over trillions more or else was
to get the remaining 43%....just like scrooge's
raid on whoville....
health does not work overseas - there are many
shortcoming which have been well documented
not the least of which being their wealthier
people coming here to get health care lest they
die before treatment....
very few report the increase of murder in holland
- the so-called "assisted suicide."
the point of universal health care is not altruism
but more control....control over your body, your
mind, and your soul....this is what access to
medical information provides....
this is the eugencists wet dream - the ability
to control breeding , living, and dying to
create the utopian state....all elite are
desperate for population control and reductions
the purpose of which is too get rid of the
unworthies.....
on Wed, 09/02/2009 - 00:04
#55862
Hear-Hear Anony!
on Tue, 09/01/2009 - 22:30
#55813
Well I do agree with a good amount of what you are saying. Our elites are corrupt and probably desperate. They are also very arrogant.
I don't agree that I want to see more blood though. That would be just more tragedy.
As for health care, the libertarian in me wants/conservative in me wants to see laws passed mandating disclosure of prices, and let the free market sort things out. The liberal in me wants universal health care if we purge the corruption and put everyone under Medicare (without bullshit "national health ID cards" or other totalitarian nonsense). Another solution would be to fund nonprofit charity hospitals. So there are definitely solutions from all across the political spectrum.
The problem is that our elites are so corrupt it's become a sick joke. You saw the memo from Huffington Post right?
Internal Memo Confirms Big Giveaways In White House Deal With Big Pharma
http://www.huffingtonpost.com/2009/08/13/internal-memo-confirms-bi_n_258285.html
On the positive side, the fact that this nonsense is getting so much exposure on the Internet is really encouraging. So it's not a total wash. I think things will get much better over the next decade after the corrupt elites are exposed and thrown out and prosecuted for their crimes.
on Tue, 09/01/2009 - 23:18
#55849
First, when I say "More Blood" I mean more NECESSARY carnage in the financial markets and NOT more of the actual jolly red stuff being spilled, unless of course it is the blood of the well-bred freaks that are running this show and that I would be okay with. They need to be held accountable for their crimes and as far as I'm concerned a mob will do just as well as a court of law. A mob is more likely since they control the courts, honestly.
By necessary carnage, I mean the incompetent economic actors being allowed to fail like they should have been allowed to in the first place. I mean the Fed pulling a Volcker and actually attempting to stabilize things instead of Bernanke exacerbating the problem by trying to reinflate the stupid bubbles.
No, I didn't see that specific memo but I was aware of Obama's sellout maneuver in terms of Big Pharma in more general terms. I actually voted for Obama: the whole thing is really starting to make me so sick I can barely stand to even look at it anymore. This, on top of the outsourcing gurus and Robert Rubin/Goldmanite disciples that Obama has surrounded himself with and the sheer volume of blatant doublespeak coming out of the Obama White House right now makes me want to turn away.
I won't even give the "Death Panels" nonsense any creedence.
The Libertarian in me realizes also that, were insurance companies not allowed a legal monopoly under the McCarran-Ferguson Act, free market competition would drastically lower the cost of health insurance and health care. The only way Fascists know how to make a buck is by capturing Government agencies and handing monopolies to themselves and this is the REAL stock in trade of the GOP despite any rhetoric to the contrary. A real Free Market would threaten their corporate interests too much for them to ever allow it to happen. Furthermore, if the US simply did quid-pro-quo trade agreements with countries that won't allow us equal access to their markets then this would go a long way towards curing the "sucking sound" of jobs going overseas. But again, the Fascists want to destroy the earning power of ALL labor by any means necessary even if it means destroying their base of support (the US) because they are quite frankly unable to see past the next quarter.
On the other hand, nothing in a Free Market is guaranteed and buisnesses will go through cycles both macro and micro and for this reason I believe in a safety net. An economic crisis or cyclical downturn should NOT screw people out of being able to see a doctor. So I am not really a strict Libertarian although I FIRMLY believe that private sector business shouldbe regulated by market forces alone, no legal monopolies, no corporate welfare.
Hope this clarifies my positions a little better.
on Wed, 09/02/2009 - 00:36
#55875
It does -- thanks
on Wed, 09/02/2009 - 07:50
#55960
They need to be held accountable for their crimes and as far as I'm concerned a mob will do just as well as a court of law. A mob is more likely since they control the courts, honestly.
http://www.chronofus.net/wargames/piracy/images/gibbet.jpg
http://www.shamusyoung.com/twentysidedtale/images/dd_gibbet.jpg
on Wed, 09/02/2009 - 11:55
#56264
Perhaps an activity the whole family can enjoy...
http://www.capitalpunishmentuk.org/gunpow.jpg
on Wed, 09/02/2009 - 00:34
#55874
>>I'm convinced for my own reasons that universal health care can work, it DOES work in most of Europe and Canada and I am well aware of the lies perpetuated by insurance companies to the contrary<<
Complete crap! Total bullshit! There is no propaganda needed to refute it. The statement is patently false and ignorant to make. Good f-in grief....what's wrong with you?
on Wed, 09/02/2009 - 13:09
#56393
Let's not forget the 54 Million Americans which
have absolutely no health care.
Health care in America is rationed not by your
health, but by the size of your wallet.
on Wed, 09/02/2009 - 13:43
#56460
It's also rationed by your health, e.g., pre-existing conditions. It can be impossible to get insurance if you have health problems. Further, as a disabled person, I know that dcctors don't order the same tests or procedures for me as they would for a more productive person, even if we have the same insurance, money, are the same age, etc.
Health care is also rationed by your race, gender, geographic location, age, etc. Doctors don't treat patients equally, even when they have the same insurance, the same income, etc. Numerous studies have shown that.
on Wed, 09/02/2009 - 04:32
#55918
Spectacularly Offensive comments by Swindler Benmosche(I am sure this man must have been a rapist in his young days. Look at the way he talks. Ready to rape anybody who talks against "FAT BONUS")
AIG’s Benmosche Says Cuomo’s Bonus Tactics ‘Unbelievably Wrong’
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By Hugh Son
Aug. 31 (Bloomberg) -- American International Group Inc. Chief Executive Officer Robert Benmosche told employees that New York Attorney General Andrew Cuomo was “unbelievably wrong” for drawing attention to staff who got retention bonuses.
Benmosche criticized Cuomo and lawmakers during a town-hall style meeting this month for life insurance workers in Houston. Cuomo subpoenaed AIG in March during a national furor about $165 million in retention bonuses sent after the firm’s bailout and said those who returned the cash wouldn’t have their names published. That month, some employees received death threats and protesters visited the Connecticut homes of two AIG executives.
“What he did is so unbelievably wrong,” Benmosche said during the Aug. 11 remarks, according to a record obtained by Bloomberg. “He doesn’t deserve to be in government, and he surely shouldn’t be the attorney general of the state of New York. What he did is criminal. You don’t create lynch mobs to go out to people’s homes and do the things he did.”
After being approached by Bloomberg today about the remarks, AIG said that Benmosche “regrets his comments regarding Mr. Cuomo and the tone of those comments.”
Benmosche has been blaming regulators for the company’s near collapse in remarks he’s made to employees since being appointed CEO this month. While comments in an earlier address focused on unnamed officials at the Federal Reserve and Treasury, Benmosche in Houston singled out Cuomo, the chief prosecutor of New York, where some of the world’s largest financial firms are based.
Closed Door Meeting
“The worst thing that will ever happen to him is when he and I meet in the room and I close the door,” Benmosche, 65, said of Cuomo. “I ain’t going to meet with him with anybody else in the room. I won’t tell you what I’ll say to him, but I will tell you, there won’t be a nice word.”
Cuomo said in March that staff of AIG’s financial products unit, blamed for the insurer’s near-collapse and subsequent U.S. bailouts, returned at least $50 million of the $165 million in awards. He said that “if a person returns the money, I don’t believe there’s a public interest in releasing their name.”
“Mr. Benmosche now recognizes that the New York Attorney General resisted public pressure to disclose the names of AIG employees during the controversy in March regarding compensation, and with emotions running high, he noted the importance of all parties to proceed with care and sober judgment,” AIG spokeswoman Christina Pretto said in a statement today. Cuomo’s office had no immediate comment.
‘Innocent Families’
“Since joining AIG earlier this month, Mr. Benmosche has held several employee meetings around the country in which employees have repeatedly voiced concerns about the threats and harassment they have experienced,” the statement said. “Mr. Benmosche vowed to do everything he can so that innocent families are not put at risk again.”
Benmosche’s predecessor Edward Liddy, who took over after AIG’s September rescue, was grilled during congressional hearings in March and May over his handling of the bonuses, which were designed to prevent valued workers from leaving.
“I would never, ever let them talk to me the way they talked to him,” Benmosche told employees. “I would have told them what to do with this job, and I would have said it on TV: ‘You can stick it where the sun don’t shine.’”
‘Nice, Sophisticated People’
Benmosche said that AIG Chairman Harvey Golub, the former CEO of American Express Co., would work with lawmakers while he focused on operations and decides which units will be kept.
Golub “is going to run interference for me in Washington, because I’ve got to tell you, I can’t be running the business here and dealing with all those crazies down in Washington,” Benmosche said, adding “actually, they’re not. They’re very nice, sophisticated people. Vote for them. Please. And give them your money.”
Also in the meeting, after suggesting that employees challenge their managers over a salary freeze, Benmosche said, “I create so much trouble, don’t I? That’s my job.”
Benmosche told staff in an Aug. 4 meeting that he plans on rebuilding businesses and won’t be pressured by regulators into selling assets at unfavorable prices.
“I’m appalled at how much pressure has been put on all of you to just sell it no matter what, because the Fed wants out, or the Treasury wants out,” Benmosche said. “If they want out in a hurry, they shouldn’t have come in in the first place.”
Benmosche, who was CEO of MetLife Inc. for eight years, transformed that company into the largest publicly traded U.S. life insurer from a mutual owned by customers.
AIG’s $182.5 billion federal bailout includes a $60 billion credit line, a Treasury Department investment of as much as $70 billion and $52.5 billion to buy mortgage linked assets owned or backed by the company.
State Probe
Cuomo’s predecessor as attorney general, Eliot Spitzer, sued AIG in 2005 for allegedly misleading investors about the company’s financial health. AIG agreed to a $1.64 billion settlement of state and federal probes into improper transactions to inflate reserves and hide underwriting losses. The company later restated earnings lower by $3.4 billion.
Cuomo, 51, may run for governor of New York, according to speculation by pollsters. Cuomo has a 4 to 1 lead over New York Governor David Paterson in a 2010 Democratic primary, according to a Quinnipiac University poll.
on Wed, 09/02/2009 - 12:15
#56291
Bernanke had better watch out... looks like Benmosche is after his job.
on Wed, 09/02/2009 - 10:09
#56091
"""the insiders who control everything know what the game plan"""
its illuminating to enter in a search for "Obama Buy Stocks March 3", the DOW @ 6726, S&P500 @ 683 this day
you all will then remember how shocked and surpised the Media was to hear Any President sound like an analyst, check the Headlines on this day. this hasn't been mentioned in the MSM since, despite his stunningly accurate bottom call. i use that date to start my Timeline for this, the most Orchestrated run-up of all time, and of couse the 2 Big Touts that helped the kick-off; 1) Citi's Pandit March 10, followed by BofA's Lewis on March 12, the same Tout Script, just changed the names. some 3 months later, connected to the release of the Stress Test the gains in the Market dwarfed by the gains by the big banks, like BofA's 5-fold increae, and the Options on those banks and FAZ & FAS prodicing gains of over a thousand percent--sure they could return the TARP seeding funds <<< that's peanuts now
i found this youtube and when i just went to pull it i found that Karl Denninger added a new one. i'll leave both here, in case anyone wants to take a look:
http://www.youtube.com/watch?v=tF0h229eoH8
FED using foreign banks to monetize debt behind closed doors
Bob Chapman talks about the dirty tricks pulled by Ben Bernanke for the federal reserve to manipulate the dollar /// recorded on August 14th 2009
[ me: i had already noticed that China acknowledged the plan to "Invest" all these $Billions this year, and most of it in the East/Asia, ASEAN 3+10 Nations, add to this the potential that exists now, after the elections in Japan days ago, for a much tighter, more friendly, relationship with China and Japan --- think regional Currency or Yuan tied Asian currencies. The vast majority of Nations already have the ability to return to the system of Settlement of Annual Balance of Trade...Yes, the use of Gold & Silver for Settlement ]
Aug 26, 2009, 11:19 p.m. EST
China wealth-fund chief tips buying spree
LOS ANGELES (MarketWatch) -- The president of China's well-financed sovereign wealth fund said his group plans a massive, ten-fold expansion of its overseas investment this year, according to reported comments from an interview Thursday.
============================
http://www.youtube.com/watch?v=iclRD3zt_V4&feature=sub
2009 09 01 Flying On Air / Karl Denninger
China threatens to repudiate derivatives contracts and the market floats on air - until today, when suddenly the fake "buying" (that is, computer passing of shares back and forth) in bankrupt firms (AIG, Fannie and Freddie specifically) disappears in a puff of smoke and oops - down she goes!
Why do Americans allow this sort of blatant rip-off to continue?
[[[ me: i think we all here know that 99% of Americans just don't have a clue as to whats going on. my only defense [excuse] for these 99% is that they're not supposed to, by Plan, by Intent, a huge, well planned procedure of the dumbing down of now a third generations, each one sequentially easier to do than the last ]]]
on Wed, 09/02/2009 - 03:49
#55917
CEO Pay at Rescued Banks Exceeds S&P 500 Average, Study Shows
Share | Email | Print | A A A
By Steve Geimann
Sept. 2 (Bloomberg) -- Chief executive officers at 20 banks that got U.S. aid received compensation 37 percent higher than the average for leaders at Standard & Poor’s 500 companies and are poised for gains as stock values rise, a study showed.
Lenders including Bank of America Corp. and Wells Fargo & Co. paid CEOs an average of $13.8 million last year, topping the $10.1 million for S&P 500 leaders, according a report released today by the Institute for Policy Studies. Average CEO pay was 430 times larger than for typical workers, and at nine of 20 banks the value of stock options soared $90 million in a year, the Washington-based research group said.
“Compensation packages for top executives, in short, remain at levels completely disconnected from any real underlying value that executives may offer,” the report said. “Outrageously large rewards for executives give executives an incentive to behave outrageously.”
Compensation at U.S. financial companies is being scrutinized after Congress adopted a rescue plan and pumped $300 billion into the 20 troubled lenders. The Obama administration named Kenneth Feinberg as a pay master for seven U.S. companies, including Citigroup Inc. and General Motors Co. that got more than one bailout.
Bank executives may be “poised for spectacularly rapid recovery” as rising share prices for nine of 20 banks getting Troubled Asset Relief Program aid led to a $90 million gain in stock-option values. JPMorgan Chase & Co. led with a $20.6 million gain for five executives, followed by $17.9 million each for American Express Co. and PNC Financial Services Group Inc., the study showed, based on calculations using proxy statements.
$3.2 Billion in Pay
The top five executives at the 20 banks had a three-year pay total of $3.2 billion, with $1.2 billion in 2006 and 2007, and $800 million last year, the study showed, citing corporate proxy statements.
The institute said government efforts to rein in pay focus on companies that got aid from the Troubled Asset Relief Program, and said results may be modest as firms such as Goldman Sachs Group Inc. and JPMorgan repay aid to avoid pay limits.
“The federal government has, to this point, not moved forward into law or regulation any measure that would actually deflate the executive pay bubble that has expanded so hugely over the last three decades,” the study said.
The Institute for Policy Studies, whose Web site bills it as “Washington’s first progressive multi-issue ‘think tank,’” releases its “Executive Excess” report each year.
on Tue, 09/01/2009 - 18:06
#55587
The Fed says: "Prior to August 31, 2009, purchases were focused on off-the-run securities in that category. Going forward, purchases will include on-the-run securities in that category. This change represents a technical adjustment designed to mitigate market dislocations and to promote overall market functioning. Over the course of the program, the Federal Reserve may change the scope of purchasable securities."
Let me run this throught the FedSpeak translator.
FedSpeak Translation: "Prior to August 31, 2009, we were running our usual scam, which we have been getting away for quite some time -- minus the unwanted publicity from ZeroHedge and Denninger. Going forward, we will change things up a bit and hope the sucker-dupes do not notice. You didn't think we were gonna stop gaming the serfs, did you? Lol. Over the course of the program, the Federal Reserve may change the scope of the scam, but the underlying scam will remain until five or six megabanks control all the productive assets in the real economy."
on Tue, 09/01/2009 - 18:07
#55595
Big banks need big government and big corporations. Big government needs big corporations, big banks, and big unions. Big unions needs big government and big corporations.
None of the them need individuals, families, or small business. Tax the hell out of them and make them go away.
on Tue, 09/01/2009 - 20:20
#55700
When billionaires are outlawed, only outlaws will be billionaires.
on Tue, 09/01/2009 - 21:37
#55773
Eat the Rich
on Tue, 09/01/2009 - 21:34
#55770
So right, man! Kudos.
on Tue, 09/01/2009 - 18:10
#55598
Hey; I got almost the same translation from Babblefish. Except at the ending sentence it came out "fuck you, your dead."
on Tue, 09/01/2009 - 21:43
#55779
Fuck yourself, you wanker! BTW it's Bablefish idiot and "fuck you, your dead." should be "I'm an idiot and a product of the U.S. education system"....
on Wed, 09/02/2009 - 13:35
#56443
Perhaps you mean Babel Fish, a reference to the Tower of Babel which you seem to have missed. Glass houses, stones, pot, kettle, etc. And I think the poster meant that s/he was fucked, along with the general populace.
on Tue, 09/01/2009 - 19:13
#55652
I doubt the FED would "Lol".
and
They already do....
on Tue, 09/01/2009 - 21:35
#55772
Not yet, but the past 10 months have been a dress rehearsal, a proof of concept wrt the gullibility of the populace.
It does ultimately, on the basis of the test run, look like a done deal, however.
on Tue, 09/01/2009 - 22:42
#55824
Crash it all. Bunkers, farmland, subsistence. Firearms.
Then extortion via biological, chemical, immunilogical agents.
Too few producers, too many eaters. ZombieLand cometh.
on Wed, 09/02/2009 - 00:20
#55867
PM, excellent posts. Keep up your great thoughts. One question: are those known-known, known-unknown or unknown-known off-the-run securities?
on Wed, 09/02/2009 - 03:00
#55904
I don't know -- I'm sure Tyler does. I think they are GSE paper, so that would be whatever garbage Fannie and Freddie produce.
on Tue, 09/01/2009 - 18:04
#55589
Does anyone wonder why the English language has so many words (something like 26,000 i think)? Is it just to say the same bullshit and make it sound intelligent to where most people won't understand it?
on Tue, 09/01/2009 - 18:19
#55600
Federal Reserve budet progoljat vorovat tvoi dengi, no seichas daje bustree chem ranshe.
on Tue, 09/01/2009 - 18:48
#55639
is that fed res. speak for "bend over"?
on Tue, 09/01/2009 - 19:51
#55680
close enough
on Tue, 09/01/2009 - 20:22
#55701
Not taking the piss, but we need a JP Morgan in the house with a JP avatar
on Tue, 09/01/2009 - 20:29
#55707
xoposho cka3a^
on Tue, 09/01/2009 - 20:31
#55713
not sure I follow
on Tue, 09/01/2009 - 20:32
#55714
Russian, got it, sorry...
on Tue, 09/01/2009 - 20:35
#55716
4to b6ilo smeshno
on Tue, 09/01/2009 - 21:00
#55738
chaka kahn
on Tue, 09/01/2009 - 21:01
#55740
V6i govorite po Ruski?
on Tue, 09/01/2009 - 21:56
#55789
Tut pochti vse govoriat po russki. Dumaete J6P zamorachivaetsya poiskom istiny? :-)
on Wed, 09/02/2009 - 03:41
#55915
Smeshno...
Nedeust chto da. Ya veru chto Istina ne zavisit ot yazuka y sposoba poiska.
on Tue, 09/01/2009 - 22:24
#55809
It really doesn't sound like it to me . . .
on Tue, 09/01/2009 - 21:07
#55745
spasibo...
A teper, pora polzovatsa moyei valutoi y pit(mahkiy 3nak).
Ha zdorovye!
on Tue, 09/01/2009 - 21:29
#55764
Interesnoe vremia v federalnoi rezervoi sisteme, ia ne vizhu horoshoi rezul6tat tozhe
on Tue, 09/01/2009 - 21:49
#55782
Wen's der Arsch brummt, ist dass Herz Gesund...
on Tue, 09/01/2009 - 21:51
#55786
nicht Deutsch sprechen
"Who's the ass is booming, is that the Heart Healthy" (Google) wtf?
on Tue, 09/01/2009 - 23:52
#55861
more accurately, if you can shit/fart, no worries about your heart.
on Wed, 09/02/2009 - 06:22
#55937
great
on Tue, 09/01/2009 - 22:55
#55837
Then my wife'll live to 120, but I'll need a clothespin.
on Tue, 09/01/2009 - 20:10
#55694
Pardon the serious answer, but the big reason is that the British Empire was everywhere, and they incorporated colonial words wherever they went. For instance, "pajamas" is an Urdu/Hindustani word. Not sure where they got "bullshit".
on Tue, 09/01/2009 - 21:08
#55746
Most bulls think we are in a new bear market so there has been a "bullshift" so to speak. Perma bears can be heard uttering... Pardon but thats "bullshit".
on Tue, 09/01/2009 - 21:56
#55788
500,000 - 1,000,000 words (including scientific terms)
"The statistics of English are astonishing. Of all the world's languages (which now number some 2,700), it is arguably the richest in vocabulary. The compendious Oxford English Dictionary lists about 500,000 words; and a further half-million technical and scientific terms remain uncatalogued. According to traditional estimates, neighboring German has a vocabulary of about 185,000 and French fewer than 100,000, including such Franglais as le snacque-barre and le hit-parade."
http://hypertextbook.com/facts/2001/JohnnyLing.shtml
on Tue, 09/01/2009 - 21:59
#55792
500,000 - 1,000,000 words (including scientific terms)
"The statistics of English are astonishing. Of all the world's languages (which now number some 2,700), it is arguably the richest in vocabulary. The compendious Oxford English Dictionary lists about 500,000 words; and a further half-million technical and scientific terms remain uncatalogued. According to traditional estimates, neighboring German has a vocabulary of about 185,000 and French fewer than 100,000, including such Franglais as le snacque-barre and le hit-parade."
http://hypertextbook.com/facts/2001/JohnnyLing.shtml
on Tue, 09/01/2009 - 18:04
#55590
It is called credit repudiation. The fed will keep shortening the yield curve until we get to zero maturity.
It is the only way to keep the cost of credit for the government from ballooning. But then no want will want any governemtn credit. Even greenbacks.
on Tue, 09/01/2009 - 18:05
#55591
What are the repercussions of a $5T federal reserve balance sheet?
on Tue, 09/01/2009 - 18:34
#55618
Currency crisis...
on Tue, 09/01/2009 - 20:02
#55687
Wrong. Inflation.
on Tue, 09/01/2009 - 22:35
#55817
Hyperinflationary currency crisis.
on Tue, 09/01/2009 - 23:16
#55847
Remember inflation is the velocity of money....THERE IS NO VELOCITY HERE IN THE US!
If you want to see what happens when you cut loose a TRILLION USD dollars into the REAL economy and GIVE IT TO PEOPLE TO SPEND...you have inflation....pull up a chart of china, and then copper ...this is what happens when there is a FLOOD of cash in the system given to PEOPLE...alot of money chasing a few goods.
Uncle Ben has cut TRILLIONS loose and gave it to banks -to then deposit in the FED (to earn interest on-first time in history BTW).....jam up markets (GS) (convince the stupid american population that all is good) and hopefully earn their way back to health. Tyler points this out day after day....
Last time I checked our credit has collapsed and THERE has been NO MONEY put into the "REAL" economy (as ZH points out article after article, validated by Top Line Corp. Rev's Q/Q).........people have no money here in the US...they are broke! Period.
China is text book inflation caused by wreckless lending. They will jam oil and commodities because they see their worth not paper. We are feeling it here this is why we feel inflation but I can assure the american consumer is not the cause...it is the CB's and Wall Street trying to fool everyone but what they fail to realize is that people are broke ...the stimulus is the only way they can literaly "GIVE people money to spend"...stimulus checks, CFC....it is not working...and won't work.
on Tue, 09/01/2009 - 18:35
#55623
As all your money is a "federal reserve note" any losses on Fed holdings debase said currency. Larger the balance sheet more potential losses. Thats just one angle but I'm sure the more sophisticated here can say more.
on Tue, 09/01/2009 - 19:41
#55670
I do not have anymore US dollars...only what I need to live off of for the next year....everything else has been moved OUT of the country not just hedged....
on Tue, 09/01/2009 - 20:26
#55706
@ Steak:
Where have you been? Haven't seen many comments out of you recently.
on Tue, 09/01/2009 - 22:28
#55811
I been twurkulatin
http://www.urbandictionary.com/define.php?term=twurkulator
on Tue, 09/01/2009 - 19:05
#55648
$5K+ gold
Oh, and "All your banks are belong to us."
on Wed, 09/02/2009 - 05:38
#55932
As much as I'd like to see precious metals go to the moon, let's not forget who's on the other side of the trade here. It has a bag of money that never runs out.
As a side note: people *really* need to have a close read of the prospectus for GLD and SLV. An investment in those scams is an investment in the prices of precious metals going nowhere fast.
on Wed, 09/02/2009 - 07:57
#55964
It has a bag of money that never runs out.
We've seen the markets' reaction to the threat of actually using the bottomless bag of money. Keep taking delivery. Gold goes into hiding. Currency crisis ensues, Leviathan chokes, opportunity arises for restoration of liberty. Keep taking delivery.
on Wed, 09/02/2009 - 12:42
#56344
I agree. TAKE DELIVERY. Stay away from these damned ETFs. This is especially the case for silver, the short position there is ludicrous.
on Wed, 09/02/2009 - 10:21
#55669
fire and brimstone
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
on Tue, 09/01/2009 - 19:48
#55677
$2000 gold
on Tue, 09/01/2009 - 19:52
#55681
Jubilee!
on Tue, 09/01/2009 - 20:09
#55693
I think the better question to ask is, what are the reprecussions of an insolvent federal reserve?
on Tue, 09/01/2009 - 20:25
#55705
That is sort of what i was getting at. At what point does (time wise) does sovereign default become a a decent possibility?
Or do they just continue to devalue the dollar?
$2000 gold = $200 oil? in which case the U.S is economical dead anyway?
on Tue, 09/01/2009 - 21:02
#55741
Over the preceding 7 days I'm observing a definite pattern here (although some may call me crazed): the delay asked for by the NY Fed from that Bloomberg FOIA on those trillions, the appointment of that AFL-CIO union guy, Hughes, to chair the NY Fed, the recent Fed grab to oversee credit default swaps, and that recent creation of theirs, the Tradable Insurance Credit (TIC -- they also refer to it as a contingent-CDS, but others might describe it as yet another securitization layer, CDSes upon CDSes).
I extrapolate this to be a Hail Mary pass (which may even turn out successful) to allow the manipulation of the pricing of commodities, precious metals, and various other items, by centralizing it under the auspices (covertly, sort of) of the Fed.
on Tue, 09/01/2009 - 21:25
#55760
Very interesting thought.
I'm wondering, though, just how long the Fed will be able to manipulate global commodities-- without it having a direct (negative) effect on the dollar.
The problem is that the Fed can be as "covert" as they want. But many here have figured out the shell game... and from all appearances, the Chinese have figured it out as well. They're just wondering how in the hell they can manage to weasel out of their newly issued Treasury holdings.
on Tue, 09/01/2009 - 22:37
#55819
+200
on Tue, 09/01/2009 - 21:53
#55787
At what point does (time wise) does sovereign default become a a decent possibility?
IMO we've already crossed the event horizon for a U.S. soveriegn default and we are approaching the singularity now.
on Tue, 09/01/2009 - 22:40
#55820
(dire)^n
on Wed, 09/02/2009 - 00:30
#55872
One of the Fed's mouthpieces (CNBC) is having an all day propaganda fest tomorrow on the Fed...YIPPY, more lies on the vomited out as truth!
on Tue, 09/01/2009 - 18:06
#55592
Coming up a little after 4pm Pacific time there should be live streaming video of the gigantic Martin Marrs Flying Tanker (sea plane) over the LA fires (it carries a quarter million gallons and is a sight to behold).
It would be ideal for Ben Bernanke compared to the puney helicopter he uses to dispense dollar bills.
http://www.martinmars.com/images/large_images/77.jpg
http://www.martinmars.com/images/large_images/8.jpg
Streaming Live at http://www.thestreet.ca
Also I hear that in lieu of payment with an I.O.U., Arnold has offered Canada a 99 year lease on Santa Monica including the exclusive use of Venice Beach for Canadians.
on Tue, 09/01/2009 - 19:22
#55655
20,000 gallons. http://www.evergreensupertanker.com/
Was in La Crescenta last night helping granny evacuate. those fires are a lot bigger and ominous in person than they are on TV lemmie tell ya.
on Tue, 09/01/2009 - 19:59
#55685
Apparently they are not using planes right now, just helicopters. So may not see the old Mars today.
Speaking of fires being scary, we were evacuated in April from a wildfire in Midwest City, OK. Several homes in our neighborhood burned to the ground. Not fun at all, and I feel for those having to live through this.
Hopefully mother nature will cooperate and they get these out. Fire season is only just beginning for CA.
on Tue, 09/01/2009 - 18:12
#55593
Jubilee.
on Tue, 09/01/2009 - 18:08
#55596
The O-Team better get on the stick ASAP to reverse this slide.
If I were Goldman (or other appointee), I would pay Dan "The Greaseman" Niles $100,000 to utter an upgrade of all semiconductor stocks tomorrow A.M., based on an increasing "book to bill" (aka Bra Size to Panty Size Ratio).
on Tue, 09/01/2009 - 18:27
#55602
I like Dan - I rembember him during dot com days and he called it like it was - could he have gone over to the other side?
on Tue, 09/01/2009 - 20:00
#55686
he went buyside, Neuberger?
on Wed, 09/02/2009 - 10:22
#55674
You could add another bar for Citi as they were forecasting 15MM.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
on Tue, 09/01/2009 - 23:01
#55830
One of your most inspired arguments ever, rbt!
on Wed, 09/02/2009 - 06:13
#55935
He who surrounds himself with pictures, isn't getting the real thing.
on Tue, 09/01/2009 - 18:11
#55599
WFC CEO all is well!?
Men who famously denied rumors of imminent collapse:
-Allan Schwartz (2 nights before illiquidity forced Bear Stearns seizure)
-Richard Fuld (loudly and consistently up to the eve of Lehman bk)
-John Thain (denial of need for additional capital 2 days before famed swap arrangement and Temasek stock sale)
-Directors of WaMu, Wachovia, BofA, Ambac, Citi.
There's a requirement to lie: for fear of a crisis of counterparty risk aversion. Hedge fund managers have to lie or else simultaneously tell the truth and pull the phone out of the wall, mail the keys to the SEC.
on Tue, 09/01/2009 - 18:28
#55603
This isn't really the fed taking the agencies into receivership, that has to wait until BAC, WFC, et al can dump the rest of the trash off into phoney, fraudie, and the fha. Until then they are trying to make it look like the agencies are a going concern in a liquidity squeeze. That FNM & FRE equities are still traded is a sign that yes, the guvmint is perpetrating fraud (was there ever any doubt?). They will be jettisoned when they are no longer useful to the pig men, with the 2010 election contributions nearing it will probably be years.
on Tue, 09/01/2009 - 18:38
#55613
http://site.despair.com/images/dpage/corruption03.jpg
on Tue, 09/01/2009 - 19:08
#55650
hahahahah
on Wed, 09/02/2009 - 03:30
#55912
Too true. We bitch and moan about the Powers That Be, but if WE were the PTB I bet we'd be doing our utmost to keep business as usual. Human nature.
on Tue, 09/01/2009 - 18:34
#55621
So now
U S Government = Countrywide
Ginniemae = Fanniemae
FedReserve = Lehman Bro/Bear
US Tres = AIG
on Tue, 09/01/2009 - 18:52
#55640
well mr. janjuah, did you get stopped out... and, are you now long?
on Tue, 09/01/2009 - 18:52
#55641
[img]http://www.threadbombing.com/data/media/17/1f2903a8b3747c08ab4d2500adf79e27.gif[/img]
on Tue, 09/01/2009 - 18:54
#55644
The saddest part is the addmittance that it is not a neutral strategy. I'm really interested in seeing what happens when these programs peak; a revolving 200bln dollar credit line is gonna just freeze up? That would spell disaster faster than they could fire it back up again, remember all it takes is one or two bad days just ask anyone who worked at BS or LEH. What the f@#k will they do when hedging strategies begin to fall apart? I think today we got a taste of who are the buyers...oh wait... the market has been floating because of dollar bashing, and treasury pushing, when the training wheels come off it won't matter how many helments, knee pads and mouth guards you've put on it's gonna crash a little.
on Tue, 09/01/2009 - 19:10
#55651
Orange Juices when you gonna start writing articles for zerosludge? or I am gonna have to come up to NYC and steal your tv ?
on Tue, 09/01/2009 - 21:43
#55778
I'll write something this weekend, email it to you so you can check it out and if you think it's okay then I'll forward it. But I should probably turn off my tv, I feel like all I'm doing recently is watching screens.
on Tue, 09/01/2009 - 23:21
#55848
When you gonna start courting a representative voice from your insane, unamerican, socialist, tax money from the haves to give to have nots, flaming fucking liberal mikey moore loving freak flock to represent your missing side, man? You'd be surprised what it could do for business . . . not that the pravda links every blue moon aren't all there is to say, just sayin'
the freaks just don't seem to go away . . .
on Wed, 09/02/2009 - 00:43
#55876
What in the fuck are you talking about, Bob? Are you drunk? Can I have some of whatever you are drinking?
By the way -- if you are talking to me I am registered independent and I voted for Ron Paul so you are WAY off base in terms of politics.
on Tue, 09/01/2009 - 19:35
#55662
there are some brilliant and insightful minds who post here.
however, a lot of the commentary reminds me of a programmer friend in the early to mid 90's who hated microsoft. His dislike led him to conclude Microsoft would fail.
Forget whether you like what the Fed is doing. Is has been obvious for some time that monetization was the only path that could be followed that would alleviate the immediate downfall of the financial system.
It is also the only path that preserves the power of those in control. He who controls the cash...dictates what others shall do. After all, we can't have the farmers dictating what people should do just because they feed everyone. Cash is the control and the yardstick. I presume that is what is commonly referred to as a "civil society."
So, given that monetization will occur and the dollar is the reserve currency, who actually gets hurt if the balance sheets of the wealthy are magically restored?
The answer has been stated here many times. The serfs. Well, no general uprising will occur if adequate food, clothing and shelter is available. Society is too complex, so that will have to be part of their solution.
Inflation? It's not really necessary. Because from the Fed's perspective, only the relative purchasing power of the wealthy relative to everyone else need be preserved. They may not say it that way, but they ARE the people in control and deciding which assets shall be preserved.
Would it really surprise anyone if they saved their assets first. And then the assets of their friends. And so on and so forth until no more saving can be done.
I'd like to see a groundswell among the population of peaceful resistance.
Everybody stop paying their mortgage and keep their house. Just monetize the debt.
And then stop paying their credit cards, keep their stuff and have new lines of credit to keep all those lattes flowing.
That's what they are doing for themselves.
One mental block on these boards is you accept economic theory as fact, when it is hardly so.
on Tue, 09/01/2009 - 20:56
#55735
"Inflation? It's not really necessary."
Oh, but I think it is. There is no other way to avoid a solvency crisis than to re-inflate. The banks need it, the fed needs it, the treasury needs it, and congress has to have it to continue maxing out the country's credit.
It is reflate or die, IMHO, but the death of the sovereign US economy may also be part of the plan...
Wilderman
on Tue, 09/01/2009 - 23:28
#55855
" . . . but the death of the sovereign US economy may also be part of the plan..."
Indeed. But inflation might well be avoided if, as you hint, an international rebalancing of accounts were to occur. Interesting, to my mind, is the question of whether the Chinese would cooperate.
What's it say about us when we have to hope the semblence of reality is defended by China?
on Tue, 09/01/2009 - 21:05
#55743
Alot of people said the EXACT same thing in the UK at the turn of the century. Which by the way was also the worlds reserve currency at the time...history is a bitch.
on Tue, 09/01/2009 - 21:37
#55774
I understand your position. However most people here can literally do the math.
The Treasury and the Fed Reserve sure ain't Bill Gates.
on Wed, 09/02/2009 - 10:22
#55664
You could add another bar for Citi as they were forecasting 15MM.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
on Tue, 09/01/2009 - 19:40
#55667
The fed commits to buy 1.5 Trillion in MBS. Can someone please explain the mechanics of how the Fed prints this money out of thin air to pay for the MBS? Secondly, of this 1.5 trillion are they also buying Agency debt and MBS? Are we talking about a debit/credit facility on the books of the Fed to buy this paper? It seems to me the Fed will never be able to get this paper off their books. How do they begin to EVER sell this paper back into the market draining liquidity from the system? I get the idea of the fed pushes money into the system and the same money comes back to buy treasury and stock. At what point does the music stop? Clearly there are a lot of bright people who see what is going on when does this end?
on Tue, 09/01/2009 - 21:35
#55771
Bingo! You're getting it.
* The Federal Reserve and the federal government are attempting to "plug the gap" caused by a slowdown of private credit/debt creation.
* Non-US demand for the dollar must remain high, or the dollar will fall.
* Demand for US assets is in negative territory for 2009
* The TIC report and Federal Reserve Custody Account are reviewed and compared
* The Federal Reserve has effectively been monetizing US government debt by cleverly enabling foreign central banks to swap their Agency debt for Treasury debt.
* The shell game that the Fed is currently playing obscures the fact that money is being printed out of thin air and used to buy US government debt.
http://www.chrismartenson.com/blog/shell-game-how-federal-reserve-monetizing-debt/25806
on Wed, 09/02/2009 - 05:29
#55931
No. You don't understand. They are just adding it to the DEBT balance sheet so the money won't actually exist until it collects taxes. They are turning all those credit card defaults and overprices housing defaults that have been feed upped and usuary upped to rediculous numbers into national debt. The fed will never forgive a debt as long as they can find someone to put on the hook for it and have sufficient military, deceipt, blackmail, manipulation forces to achieve thier objective of having at least controlling interest in every financial endeavor.
on Tue, 09/01/2009 - 22:01
#55793
"It seems to me the Fed will never be able to get this paper off their books."
This is a very important and often-overlooked point. Once the Fed is loaded to the gills with MBS, they will be an albatross around the Fed's neck like U.S. Treasuries are now around the neck of China. Can't sell them too fast for risk of crashing the value of the remaining holdings, killing the Fed's asset values AND destroying the "recovery". This renders them useless for monetary policy, except as a super-powerful damper.
on Tue, 09/01/2009 - 22:17
#55803
They will never be able to sell $1.25T into a market that is only $5T in size.
If they even stop at $1.25T. I am betting they keep going through $2.5T.
on Wed, 09/02/2009 - 02:54
#55902
If AIG can go from 12 to 50 (and now 36) in a month, surely they can repackage and sell anything, just like KFN just did. They'll just have the robo-traders shuffle them back and forth until the mutual funds jump in ... voila!
on Wed, 09/02/2009 - 07:26
#55946
I'd like to hear your thoughts if you factor in duration and default. What is a realistic timeline for this to work through and what may be the final loss tally?
on Tue, 09/01/2009 - 22:10
#55799
+1, thumb up!
on Tue, 09/01/2009 - 22:10
#55800
+1, thumb up!
on Tue, 09/01/2009 - 22:10
#55801
+1, thumb up!
on Tue, 09/01/2009 - 19:53
#55682
even nassim taleb was FOOLED and actually thought that the current administration would be better than the last:
"I am particularly depressed because, having been disappointed by George W Bush, I had high hopes for Obama. David, spare us from such hubris.
Yours, Nassim"
http://www.guardian.co.uk/commentisfree/2009/aug/16/nassim-nicholas-taleb-economics-cameron
on Tue, 09/01/2009 - 20:08
#55692
Damn the torpedoes, full speed ahead!
If everyone is fucking up and trying to blame me, well fuck them. I am the commander of this shit.
BB
on Tue, 09/01/2009 - 20:11
#55695
Guess fishing for Koi in open waters didn't pan out.
on Tue, 09/01/2009 - 20:22
#55699
What is the endgame for the agencies? With the fed rolling foreign CBs out of agencies and into Treasuries, what do they do after the 1.25T commitment? Formally nationalize and nuke the agency balance sheets in the process? Leave anyone stupid enough to still be holding treasuries with a big bag of doo? At some point duct tape and hope will cease to hold the agencies together.
Reason #9872343995 that the USS Hindenberg is continuing its slow death spiral.
on Tue, 09/01/2009 - 20:44
#55722
Can anybody shed some light on the rumors of China floating its Yuan? and if it does, the dollar is ashs.
on Tue, 09/01/2009 - 22:43
#55826
Bit by bit, they're a patient bunch
"Cross-border yuan settlement in Shanghai has exceeded 39 million yuan since early July."
http://english.caijing.com.cn/2009-09-01/110236328.html
on Tue, 09/01/2009 - 23:27
#55854
Guess which bank I moved my funds too...nice one Steak....
on Tue, 09/01/2009 - 23:45
#55857
Yep, the PBOC is slowly but surely establishing bilateral currency swaps with all trading partners. Before too long the only time they'll be using the US dollar is to trade with the US. Enough countries follow suit and and the USD is dead.
Now if you *really* want to see hyperinflation, that's the way to get it; when every man and his forex dog start sending the fiatscos home.
on Wed, 09/02/2009 - 00:54
#55880
China has a long history of shooting itself in the foot, or to use that other well-worn phrase, snatching defeat from the jaws of victory.
I will bet on China no more than I bet on Japan in 1990 when it had all the money in the world and was about to own or control everything. Sometimes things just do not pan out according to plan.
Look what has happened after China’s $580 billion stimulus? What have they gotten for it? A quick pump, and burst, of its stock market. A quick pump, and burst, of its property market. A quick pump, and burst, of commodity markets. A quick buildup of factories, of which they already had too many. A quick pickup in industrial production, at a time when their exports continue to tumble.
Call these “bad debts”. Money went out the doors of banks at a rate three times last year. Due diligence? Major companies on the receiving end then either bought BMW’s, or sent the money out the door to smaller firms and speculators who would not otherwise have been able to tap into a major bank.
So China has begun setting up all these currency swaps with potential trade partners. Wonderful. China doesn’t need to buy anything else (commodity stockpiles are huge), and their trade partners do not need to buy anything from China.
Now what if: 1.35 billion people who had all expected to be driving MB’s or BMW’s by now get upset. Yes, they are accustomed to deprivation (as well as depravation), but the last decade or so has given them something wonderful but potentially extremely dangerous: HOPE. Dashed expectations are something with which no authority likes to deal. If China has a blow-up, and not just the small kind that are popping up from time to time in steel factories, the Shensen area, areas where the degraded environment is causing great harm to local inhabitants, what happens to the yuan? Its inexorable rise, like that of the country where it is used, is not guaranteed.
on Wed, 09/02/2009 - 12:50
#56355
No doubt, no doubt. Don't think for a second that I'm a China bull, no way. I side with Hugh Hendry's call: "China is a deep out-of-the-money call option on American consumption", and the decoupling effort, to replace the foreign consumer with a Chinese one is not proceeding well. I'm just less bearish on China than the US right now as China actually has industry of worth.
on Wed, 09/02/2009 - 08:03
#55966
I am kind of surprised the Chinese allowed themselves to be surprised by this. They are behind the curve getting trade established in Yuan; or did they merely need a public reason to do so?
on Wed, 09/02/2009 - 00:12
#55865
Japan cuts us off
China cuts us off
Russia cuts us off
Canada cuts us off
That leaves america isolated, broken and in trouble. Then they watch to see what happens to the citizens. If things look very dangerous facist, genocidal etc. Then they put the rabid dog down.
on Tue, 09/01/2009 - 20:49
#55729
This monetization is going to create a crater so large in the long term value of the dollar it should have any sane person buying bullion by the truckload. Hedge funds are not loading up on bullion for any other reason as they knew this was the ultimate course of the Fed as did anyone else with two functioning brain cells.
on Tue, 09/01/2009 - 20:58
#55737
The rotation into recently issued MBS follows the rotation out of retiring old treasuries to purchasing newly minted bills. This is another clear signal that the pretense is over.
on Tue, 09/01/2009 - 21:08
#55747
The Green Toilet Paper is now single-ply.
Oh if only gold were not such a barbarous relic! I would certainly buy some if only it would pay interest!
on Tue, 09/01/2009 - 21:25
#55759
Gored by bull, mauled by a bear, or wrapped in a body bag. The Perps are going to need one helluva a "distraction" to save their asses. Disconcerting.
I've heard estimates that China is now unloading foreign reserves at the rate 100+ billion per month; which seems realistic considering the ramp-up of investments - that we know about - over the past 2 years. The bell, cliff & reaper await.
on Tue, 09/01/2009 - 21:27
#55762
where the heck is cheeky bastard? i kinda miss that punk. well maybe his avatar.
on Tue, 09/01/2009 - 22:09
#55798
...etc,etc,etc,
I'm new here...WOOHAH !!!! this is sweet.
on Tue, 09/01/2009 - 22:43
#55827
Coupon passes are nothing new. Go back to the spring of 05, when this charade began to break down, and you'll see that Greenie did 5-6 in a three week(April-May) period that ultimarely saved the market and perpetuated(root cause, imo) the mortgagae bubble. Greenie wanted to go out with a bang; with rep and ego intact( Marketing deals intact; he always thought he was way underpaid).I was short and lost big. Ben new otherwise, and shunned the "coupon pass", in effect, tightnening money, which subsequently led to a blow up of the system and hence the problems we face today. Think of it in terms of drug addiction... Ben thought he could quit cold turkey; his dealers thought otherwise.
on Tue, 09/01/2009 - 22:46
#55832
Crash to save bonds and $. Then Kapoom, dollar plunge, probably instantly-catastrophically. Globalism ends. Latency then WWWIII in some form.
on Tue, 09/01/2009 - 22:55
#55836
John Jansen's Across the Curve and Zero Hedge are the two best financial blogs that I know. Keep the good work guys!!!
on Tue, 09/01/2009 - 23:00
#55839
The most hidden of realities might be: that however a man tries to position himself in life, however he tries to manuever a portfolio of dead works of industry (saved monies), however he tries to cheat any system, or skip on life's tab, an ultimate unseen balance sheet keep track. There is no escape from the compleat accounting system of the universe. Dust to dust, ash to ash, and all in between is all-and-ever seen. By which man rises or descends the pyramid (or Jacob's Ladder) to a pinnacle of life.
But maybe evolution is the right path, and all is random, and theft from one's future can actually be done.
Then again however much I hoist my tail, I cannot levitate.
on Tue, 09/01/2009 - 23:07
#55843
A JP avatar? That would require a Rothschild as the Stromboli puppeteer. And a sleepy, ignorant village of Katchfools to sit for performance.
Ah, but of course. We have that.
on Wed, 09/02/2009 - 00:38
#55846
No-one has mentioned ye-olde 'moral hazard' yet.
All the geniuses in Product Creation just found themselves a buyer with infinitely deep pockets. Sweet! Now the new slogan is "Re-risk like it's '06!".
Thanks to guys like Martenson bothering to look (something that seems out of the capacity of the MSM), we know that the Fed's direct acquisition of Treasuries is a smaller component of the QE program. A larger component is to allow foreign Agency holders to swap to Treasuries, facilitated by QE cash.
I see two main reasons for Count Fedula now stepping into the horrible burning daylight as a direct buyer:
If I'm right about this then that last point (a global casino) presents as a major kick to the balls. Bets cross borders and many do not settle in US dollars. The Fed stepping into the game means we can expect to see some big fat currency swaps going down and, depending on the ratio of losers to winners, big moves in the US dollar in the future. Which way? I have no idea, perhaps only the IMF, BIS and select members of the Central Banking Cartel know? Who else is any position to monitor the network? My guess is down.
Putting my conspiracy hat on for a second, these activities seem to play nicely into the single world currency story, providing a very simple mechanism to 'break the buck', allowing the IMF to come riding to the rescue with SDRs, as PM already pointed out. I'm not saying that this would necessarily be a bad thing...just saying.
In summary, it seems that derivative bets are fast becoming *the* mechanism now for controlling money supply. Oh dear, the Fed is a problem gambler. But hey, on the positive side, if you're in the risk assessment game, your future employment prospects at the Fed are looking up! And, on the other side, there will be jobs a-plenty for obfuscators whose mission it is to game the Fed's risk-assessment teams; something tells me that will be like shooting fish in a barrel.
on Wed, 09/02/2009 - 00:50
#55878
Here is a quote from A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers by Patrick Robinson;
So revered was this group that they were permitted to invent, along with other Wall Street firms, a moneymaking scheme that by the middle of 2005 took off like a whirling dervish and made billions and billions of dollars before finally disappearing up it's own backside, helping bankrupt half the planet.
There is just no way that the people of the United States and the world will let the crimes of this syndicate continue. The people who passed the laws to take down Glass Steagall, increase leverage and turn a blind eye to it's own will be accountable very soon. Their gig is up and they know it....the cat is out of the bag, this last bankheist was enough to wake up a very complacent country, and i am getting some hope that indeed, we will get our country back.
on Wed, 09/02/2009 - 02:55
#55903
They exploded a bomb outside the Greek stock exchange just fucking now.
Project Mayhem, get these guys on board ASAP. We need them over here in North America on the double.
They made sure no civilians were hurt, so the message of the bombing will actually be absorbed by people. You can bet the people in Greece aren't going back to sleep any time soon. They have this shit figured out.
This group who is claiming responsibility earlier bombed a Citigroup in Greece!
"Revolutionary Struggle". They got balls, and it looks like they got enough brains to figure this shit out.
on Wed, 09/02/2009 - 00:54
#55881
Does anybody ever read anything this far down the list!?
Anyway, the Fed has been trying to create inflation as a way to blunt the effects of WAY too much debt both public and private. They have flooded the world with money, but its not working. The debt is too big and will drag us all down no matter what the Fed does.
We are in a global deflationary spiral. It is due to too much debt being created by the worlds bank's and the shadow baking system. The central banks are standing before a tidal wave of credit defaults they cannot begin to cope with. They are printing and "borrowing" money as fast as they can, but its way too little, way too late.
We are experiencing mild deflation at the moment, but this is at the same time the Fed is unloading everything it has to stop deflation. In other words, all Hanks's bazookas and all Ben's helicopters aren't nearly enough.
The sad thing is we all thought the central banks could save us. Heck, they thought they could save us. But it is dawning on all of us, one by one, that this monster is totally out of control.
This credit crisis is like a glacier. It moves slowly but inexorably bull dozing villages as it descends the valley. We become aware of its inevitability, but we have only one choice: move down the valley or be crushed.
on Wed, 09/02/2009 - 00:59
#55884
Best thread ever on ZH. ZH best blog ever.
on Wed, 09/02/2009 - 01:10
#55888
First post
TD (and all his/her creators), many thanks.
Great thread. One thought. When tshtf bureaucratic rats jump. first signs may be apparently random departures as 50 something middle-level powers that be see that they're not on the lifeboat list. fwiw
on Wed, 09/02/2009 - 01:12
#55889
This problem is so easy to understand.
There is too much debt in the system.
I ain't no rocket scientist but I sure can read ;)
on Wed, 09/02/2009 - 02:02
#55896
The problem is that economists don't understand Physics. They have tried to build a perpetual motion machine which, if they understood Thermodynamics, they would know is a pointless exercise and can only fail.
Entropy here is being represented by debt.
That is the fundamental problem. Physics pass, Economics fail.
on Wed, 09/02/2009 - 02:25
#55898
There is a point at which even physicists fail (yes, even Einstein)
There is an innate desire imbeded within the human that MUST understand the unknowable.
Humility is a virtue that even the smartest fail to understand.
on Wed, 09/02/2009 - 11:23
#55919
Must be good for to warm their hands with the heat from the friction they got by loosening a bolt in the town watermill.
on Wed, 09/02/2009 - 03:07
#55907
Cart before the horse. Too much debt a function of less than living wage. Surely you feel that PDM.
on Wed, 09/02/2009 - 04:26
#55920
Too much debt is a consequence of a fundamental flaw of the monetary system. Almost all money comes into existence through new loans but no money is created to represent the interest that is charged on those loans. A classic Ponzi dynamic.
The consequence can only be debt. High taxes, insufficient wages, social strife, deflation and eventually war are inevitable consequence of this.
The only way to keep the Ponzi scheme going is to draw an exponentially increasing quantity of resources from nature and bring them to market at a rate that exceeds their decay. On a finite planet it can only fail. I have to laugh at the tree-huggers, while they fail to address the core problem (the economic system), all their attempts to save the world are doomed. Sounds funny to say, but Ron Paul is way more 'green' than Al Gore.
Again, if people actually understood Thermodynamics, this insane system would be long dead and buried.
on Wed, 09/02/2009 - 04:48
#55925
"Too much debt is a consequence of a fundamental flaw of the monetary system"
Too much debt is a consequence of spending more than you have...greed (which happens to be a good thing) untill it isn't....
Coke is great...till' you overdose bleeding out of your nostrils and have a cardiac arrest (same as too much leverage)
on Wed, 09/02/2009 - 05:46
#55930
No, the problem *is* the monetary system itself. Before the collapse ~99% of new money came into existence as a loan of some form. This is the method that our lords and masters determined to be most efficient at distributing money to where it is needed in the economy. Distribution is perhaps the most important component of economics and in that respect, the existing model is very successful (compare it to the utter failure of distribution in the USSR).
The flaw is usury. It is not possible to pay all debt back because there isn't enough money in the world to do it. The system, by its very nature, requires a greater amount of debt to come into existence in order to pay off existing smaller debt. That's the Ponzi dynamic right there. Debt can only increase and increase until something breaks. When the break occurs then the smoke and mirrors come out in force, as we see now.
The whole scheme collapses under a mountain of debt, it's the only possible outcome for a Ponzi scheme. Greedy people may bring that collapse forward a little by willingly running up unnecessary debt, but this is not the root of the problem. Blaming them is like blaming the people who trusted Madoff. Of course, the MSM blame this all on greedy, ignorant speculators, it's the lazy answer and part of the smoke and mirrors. What interest does the MSM have in explaining what Central Banks actually are or how they work?
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