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GAO Finds U.S. Government Likely Stuck Holding GSEs Forever
"It may be very difficult to credibly privatize [the GSEs] as largely intact entities. The financial markets likely would continue to perceive that the federal government would provide substantial financial support to the enterprises, if privatized as largely intact entities, in a financial emergency."
Which basically means that as more and more foreclosures keep hitting (see RealtyTrac report this morning) and as agency and MBS borrowing standards are loosened ever more (see Credit Bubble formation ref: Alan Greenspan), US taxpayers (and China) will be forever on the hook for the next credit-housing-liquidity bubble.
Chairman Ben, by creating the largest Mutually Assured Destruction scenario ever, has effectively put a gun to everyone's head and proclaimed the Fed's balance sheet TBTF. If only Bernie "Scam of the Century" Madoff had access to the same (Made In Heidelberg) gun...
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...it took them a YEAR to realize this?
Is there some indication besides volume for calculating the HFT-volume on the NYSE?
NYSE states about 30% is HFT but checking the zombiestocks tell another story. I am a "noob" in relation to financial analysis. Anybody who can give me a hint to this calculus?
The Fed balance sheet will end up like the Hindenburg.
I take issue with your tense choice.
While right now it is in a quantum state since we're not allowed to conduct a full audit of the bank that manages our money, I would make a bet that the poor kitty is dead.
I don't disagree with you but my choice was due to the lack of visible combustion yet, which I think will at some point has to appear.
www.RevokeTheFed.comMarch 2008
WHEREAS, Article I, Section 8 of the Constitution of the United States of America authorizes Congress "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures";
WHEREAS, on December 13th, 1913 the US Congress enacted the Federal Reserve System;
WHEREAS, the Federal Reserve System is considered an independent agency within the federal government, with oversight of Congress and containing appointed public officials on its board of directors;
WHEREAS, the Federal Reserve System Controls the Federal Reserve Note, the official currency of the great nation of the United States of America;
WHEREAS, there may be controversies regarding the legality and constitutionality of the Federal Reserve System, it is recognized that the said system has operated continuously as the central banking system of the United States since the inception of the Federal Reserve Act of 1913;
WHEREAS, the Constitution of the United States of America granted Congress the authority to create the current Federal Reserve System, it also does grant Congress the authority to modify or revoke the Federal Reserve System;
WHEREAS, the actions of the Fedreral Reserve System represent the credit and currency of the United Stated of America to the citizens of this great nation and to the world;
WHEREAS, the Federal Reserve System, acting independently within the federal government allowed, supported, and even promoted parasitical and non-productive uses of the money and credit of the United States of America;
WHEREAS, the United States and likely the entire world's financial system is undergoing massive de-leveraging of the said parasitical and non-productive uses of the credit and money of the United States of America (as well as other nations' currencies);
WHEREAS, the US dollar, the "Federal Reserve Note" is declining in value due to these parasitical activites, as well as potentially other causes;
WHEREAS, it is recognized that the citizens of the United States and other nations did willingly participate at some level in the creation and propogation of said parasitical activities;
WHEREAS, it is also recognized that the United States of America, a sovereign nation, has the legal, moral, and God given authority to take actions to benefit its citizens and to protect its good name, credit and money in times of difficulty;
WHEREAS, it is recognized that the current time is such a time of great difficulty;
WHEREAS, it is recognized the parasitical financial institutions and their activities are at odds with citizens of the United States of America and the good credit and money thereof;
WHEREAS, the current indications are that the Federal Reserve System is acting to preserve the financial system currently flooded with the parasitical activities;
WHEREAS, the current indications are that the neither the Federal Reserve System, nor the Congress of the United States, nor the people of the United States have access to the books of the institutions being preserved by the Federal Reserve, and therefor the degree of inter-connectivity and risk associated with the institutions and other entities cannot be determined;
WHEREAS, the Federal Reserve System is accepting non-performing assets as collateral for credit with ultimate taxpayer responibility to entities not under its legislative mandate;
IT MUST BE CONCLUDED, that the Federal Reserve System is not acting to the benefit of the people of the United States of America, its credit, money, and good name;
WHEREAS, it is recognized that the political will and capability of the government of the United States of America may not be up to the task of prosecuting this proclamation ; It is also recognized that this may be the only hope for the continued survival of the United States of America as the great nation as it has historically existed.
NOW THEREFORE, it is PROCLAIMED by those supporting this Proclamation that the Congress of the United States of America FULLY NATIONALIZE the Federal Reserve System, and take full control of the credit and money of our great nation; The Congress must take whatever action necessary to seperate out, sequester, disown, or otherwise neutralize the effect of the parasitical financial activities which led to the current crisis; The Congress of the United States of America must reorganize, replace, or terminate the Federal Reserve System as appropriate; or otherwise devise a system for creation of the national currency.
IT IS FURTHER PROCLAIMED, that the Congress of the United States of America in cooperation with the Executive of the United States of America contact allied nations and any other nation willing to participate in the overhaul of the failing and parastical financial sytem currently in operation and create new treaties and alliances as necessary to create a sane and productive system of finance with the express goal of supporting a productive national, and by extension and through voluntary cooperation, world economy;
FURTHERMORE, it is PROCLAIMED that it should be the goal of such an international effort to maintain fair international trading practices allowing for protection in national interest of labor, resources, and productive capabilities;
WHEREAS, it is recognized that such a move on the part of the United States of America may result in the necessity of an isolationist policy IF the other developed nations do not follow our lead; If such occurs, so be it.
SO HELP US GOD!
'Unwinding stimulus policies would be like putting toothpaste back into the tube' - Alexei Kudrin, Russia's finance minister
Now we are getting to the point where the TD in question either:
a. Hasn't bothered to check the history of U.S. housing policies. Meaning the whole f!cking point was to give as many people possible the opportunity to buy a house. On a national scale, that makes a very politically stable and compliant population.
b. It's a f!cking Government Sponsored Enterprise!!! Meaning it never had a snowball's chance in hell of ever working as a private enterprise. Check your history on GSE's and you will find legislation that spun it out as a standalone heralded by the ardent supporters of deregulation. Mysteriously, the GSE was looted as a private enterprise. Gee, no one saw THAT coming. Oh except for the outliers categorized as liberal nutcases.
Do your f!cking homework before posting half-assed congratulatory proclamations of your market wisdom.
On a national scale, that makes a very politically stable and compliant population.
You mean, until they go bankrupt. Right?
It worked damn well from somewhere in the 1950's to maybe 2000?
It stopped working for at least a couple of reasons.
1. There weren't real wage increases to keep housing 'affordable.'
2. Individualism as proposed by most conservatives has a very high social costs. A few have beautiful homes, many have shacks, the rest are homeless. The credit scenario has just put off this state of the nation for a few years.
The irony is the elite are then offended by the site of beggars, mentally ill wandering the streets, rotting infrastructure 'polluting' their world view. According to them, that's someone else's problem and has nothing to do with their values.
they should start small. The default rate on their "credit enhanced" guarantee portfolio is 4X the default rate on their overall portfolio.
http://www.fanniemae.com/ir/pdf/monthly/2009/073109.pdf
Credit enhanced generally means loans with Mortgage Insurance, i.e. loans with an LTV over 80.
Forget about the structure of how mortgages are financed, concentrate on what mortgages are allowed. Limit borrower-level leverage and it won't matter how they are financed. 20% down minimum and the problems are greatly reduced.
What a surprise...
whooocooodanoooode?
Better us than the dumbass foreign boys we let off the hook. quit reminding me of the bailout we know....just think about what really has gone on under the table or caverns deep.
The GAO has been something of a non-team player, hasn't it? Suggesting AIG stick it to the shareholders instead of the taxpayers, reporting actual numbers on projected deficits, etc.
Who are they? How do they get their jobs? What sort of leverage will be applied post-hast to make them more... compliant? They sure don't seem to act like good political appointees...
no shit