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New York Fed: We Prevented The End Of The World
The alternative to threatening with global thermonuclear warfare, should the Fed not get its way, is, of course, the Fed congratulating itself for its heroic activities that, in some interpretation of the quantum "multiple worlds hypothesis" theory, prevented certain [un]told destruction. Only problem is, of course, what the Fed prevented is merely wiping out the equity and subordinated bondholders in the GSE and the big banks, the preservation of whose perpetual bid for US Treasuries is and has always been the number one purpose of the Fed, so that the US can continue funding it ever increasing budget deficit. Yet a reminder of just how stunted logical thought is at the Fed, here is the Fed's Thomas Baxter, pulling a terrific Colonel Jessup, telling all that by bailing out AIG, the Fed should receive humanitarian of the century award, and a purple heart on top, for all the heat that Fed SVP Sarah Dahlgren should and will receive in Congressional testimony relatively soon.
The actions taken by the Federal Reserve and its New York office to rescue American International Group Inc. (AIG) were necessary to avoid the "potentially catastrophic consequences" of a failure by the insurer, a top official plans to tell lawmakers Wednesday.
Thomas Baxter, the general counsel for the Federal Reserve Bank of New York, defended the actions by government officials to stem a major cash bleed at the insurer in November 2008 by reaching agreement with over a dozen banks to tear up $62 billion in insurance contracts.
In prepared remarks for a Wednesday hearing before the House Committee on Oversight and Government Reform, Baxter said officials had little time and leverage as they scrambled to prevent AIG from spiraling towards bankruptcy. After stepping in to rescue the insurer in September 2008, officials could not let the insurer collapse weeks later, Baxter contends.
And the kicker, from Dow Jones:
"This abrupt reversal of course would not only have triggered all of the adverse consequences for the U.S. and global economies that prompted the initial intervention, it would also have undermined the public's trust in the U.S. government's commitment to the broader range of extraordinary financial stability initiatives," Baxter said in testimony reviewed by Dow Jones Newswires.
Way to extrapolate there Baxter. In other words, the TBTF paradigm will never change - not only will equity prices be preserved in perpetuity to prevent the kleptocrats from seeing an impairment on the bonuses, but any impairment on fin sub debt is completely out of the question - surely antagonizing sub debt lenders, and particularly those of the GSEs, will result in the universe imploding into a Fed-sponsored ball of hyperinflationary bullshit.
Dear America - these are the megalomaniacs that will continue stealing all of your hard-earned money, long after Obama, and his promise of a tangible change, is long forgotten. Please enjoy.
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Welcome back, my friends
To the show that never ends
We're so glad you could attend
Come inside, come inside
Market, meet tyrant
Investor, meet mattress
Fun fact: Paying down your mortgage is like buying corporate bonds, only safer
Fun fact: Keeping 401(k) funds in money markets/cash is, approximately, INFINITELY safer than having them anywhere near these tyrannical lunatics and their pet Vampire Squid.
Well played
+ 1
"tyrannical lunatics" Only one proven way to deal with these types.
I think I would have preferred the End of the World.
Could you image the party sourrounding that event? ;)
It's already been aranged. Everbody's meeting at Milliways
Karn EVIL 9
We saved your ass, you should be grateful what we do for you. Without us you would be nothing but charred remains. Say What?! With you we're burning to death slowly.
Have you noticed that too? The whole crowd (TARP)
is a bunch of ingrates. Bernanke must be tearing
what little hair he has left out by the roots as
he takes all the heat. Poor guy. Geithner not so
much, he needs to be shown the door if he hasn't
already behind the closed one. On the bright side
for Butt-head the private sector awaits and I don't
mean GS. My open question right now who is the best
Beavis to Geithner/Butt-head? Any thoughts from the
peanut gallery known as ZH bloggers? Dodd maybe?
Thank you Fed from doing everything in your power to prevent homes from being affordable and shackling Americans to debt.
We prevented the end of the world? More like forestalled.
And in doing so we accessed your savings, retirements, and emergency rainy day funds through criminal printing and dilution.
So we have pushed out Armageddon a little in time, but assured that it will be much, much more painful.
You're welcome!
The greatest technological innovations, made by both financial and legal engineers, over the last 100 years has been the development of semi-private, quasi-governmental agencies.
Appearing in the form of both the Fed & Fannie/Freddie, they have proven to be absolutely incredible devices for bypassing and escaping oversight from all visible branches of government.
But the best part of all is not that they aren't subject to government control, but that they still get to claim protection under national security! That means any potential prosecutions will be covered by presidential pardons.
Jeez, Skilling (Enron) was such a putz with his amateur level SIVs. No wonder he pulled a 20 year sentence - 1 for the crime and 19 for being so stupid. The way the game is supposed to be played is being demonstrated by the masters.
Thank you for doing God's work.
Sorry, one more thing: Doing something evil to prevent the world from being destroyed is not noble. It is still evil. Taking hundreds of thousands of dollars from my baby in his crib and my toddler in her bed is not noble. It is evil. When Dr. King or Ghandi violated the rule of law in the interest of justice, they went to prison. That is noble. Standing with haughty pride and demanding a ribbon for sticking a knife in America's back (but it had to be done! Just like torture!) doesn't make it noble.
And that, that my friends, is all assuming that the world would actually end if any bond haircuts occurred. That is a policy call, one that is not openly admitted, let alone communicated or debated. It is THE policy call, the one that makes us Japan for the next thirty years (i.e. no real returns on any financial investments).
To say that paying filthy fat cats billions of dollars at the point of a financial gun was anything else than a historic blow to American values and interests, a day on a par with 9/11 and Pearl Harbor, even if it was necessary (and I don't think it was), reveals a complete lack of basic common sense and unfitness for any responsible position in government.
Hell, I wouldn't pay this fool to scrub toilets in Grand Central Station.
Excellent post, among many excellent offerings in this thread. Huzzah.
Compromise the currency.
Compromise the integrity of corporate structure.
Compromise the feedback and control of bond markets.
Compromise PMs and purchasing power.
Overinflate equities.
Comment: Of course the lemmings will return en masse to the playing board, where they will lose what little accumulations they have. If they don't, they will lose even more. We will make them howl!
"Fed & Treasury white sheet"--to be redacted.
It is far nobler to scrub the toilets in Grand Central Station than to be running the Fed, the SEC, the CFTC, and the TBTF banks, insurance companies, car makers and any other bailed or to be bailed company.
While we get bilked by our government and their handlers, they whisper sweet nothings in our ears to soothe the pain. Lock and load buddies.
Of course the TBTF paradigm will never change. It beats the alternative hands down.
And where did the Fed claim national security?
Just checked, all my hard earned money is still mine. Whose money are they stealing? Show your math.
Anyone who holds that opinion after all we've heard and learned about AIG, the Fannie Macs, the Fed, Timmah, Hank, Ben and the rest of the gang, and the other assortment of at least grossly negligent, if not criminal actors in the past 2 years, will not be convinced by a lengthy recitation of the facts.
+1
this person is not paying attention, is in denial, or has a deceitful agenda.
I'll be the charitable one here and add the potential that this poor misguided person is a Gerbervore and cannot subsist without slurping up their goop by the proffered spoonful and then regurgitating it for the rest of us thinking they are doing us a favor by attempting to "educate" us as to how necessary it is to follow suit.
Well played sir. +1000!!! His hard earned Federal Reserve Notes may still be his but most likely not for long. We all will pay for these decisions in the form of higher taxes (at the very least). And i won't even elaborate on my other tin foil hat scenarios.
not to mention inflation, and i ain't even talking about the hyper- kind
I'm surprised you were smart enough to figure out how to use the internet if you honestly think you haven't been robbed.
Get Barney out! http://www.rachelforcongress.com/
The NY Fed did prevent the end of its own world. They define the world as they see it, and they saved it.
+1 It's a small world after all.
All hail FED! All hail FED!
So when the other shoe drops can we line these "savior" up against the wall and (metaphorically, of course) shoot them?
Gad, spare us all the masterbatory self-congratulation fellas. It's family hour.
That sounds like:
You want me on that wall!
You need me on that wall!
Unfurling the blood spattered, Old Glory defense. It will be the star witness. Francis Scott Key should write a ditty about these guys. How the banks were still there. . . .
Imagine if Bernanke was the head of a drug rehab clinic instead: "I gave him more Crack to treat the catastrophic withdrawal symptoms".
Yeah, and he would buy the crack from his dealer buddies for 5 bucks per pound and re-sell it to the "addicts" for 5000 bucks and split the profit with his dealer buddies. And would praise himself as a noble humanitarian who prevented crack epidemic.
ahhh the lawyer game, "potentially catastrophic consequences." Driving to work has the same risk. Doesn't mean you steal everyone else's car to save on insurance.
They are clearly delusional.
Yep.
Just as big as the collateral damage they incurred on American taxpayers via moral hazard, it's just as repungant that the Treserve covered up as much as they possibly could to conceal the looting.
Instead of patting yourselves on the back on saving your world-- the finanical world-- you should be ashamed of what you allowed to happen. Putting the pieces back together with band-aids and evil intentions doesn't make one a matron saint.
In most circles, it makes one a criminal.
Lord knows what I would have done without GS and JPM for the last year! They are saints in a world gone mad. I can not wait for the day that we will be ruled by the rule of law, not the law of the jungle, and that this law governs the law of nations.
The on-going audit of AIG must have uncovered the unthinkable. This is the type of rhetoric you would expect from a very scared group of people- providing a reason for what has been uncovered before what happened is even reported.
And now, Hank(I don't care who goes down) Paulson is about to take questions from the committee.
Threats and misinformation campain in high gear.
the money printer - who saved the asses of AIG and the banks - ergo "The World" - is wanted for infinite runs of the printing presses. "Whatever it takes" in his own words.
What I find disgusting is statements like this from Dallas Fed Chief Richard Fischer. This indicates that under no circumstances will the American people be given freedom via monetization of the Trillions in toxic bank assets they have been forced to swallow. Tyranny.
We should be so lucky to only inherit INFLATION. Pandora only wanted a peek. We'll get the full monty.
Gotta love Dallas Fed head Richard Fischer running point on this one. He is attempting to sow the seeds of fault-finding with Congress should "Audit the Fed" actually become law. Laying the disastrous results of unlimited printing authority/monetization at the feet of Congress should HR1207 become law when it should be fairly obvious by now who has the unlimited authority and has been using it. Way to get out in front of the curve, Dick Fischer!
Yeah... the problem is, monetization is ALREADY OCCURING-- and in the least efficient way possible!
The Fed keeps whining about losing their "independence"-- which again, for the thousandth time-- is total disinformation.
No... the American people are demanding the Fed to be held ACCOUNTABLE for their actions. The is plently of room for the Fed to maintain its independence in making decisions regarding moentary policy-- while holding the insititution accountable.
Road to ruin? The road to ruin is tyranny, not the lack of Fed independence. And it seems the Fed is the one laying the asphalt.
Come one...come all...
Because I have the keys to the podium....
And you don't....
I am the show....
So come one come all....
................................
Let's do this then....
Stack $12 Trillion debt on the innocent....
Let's make no move ....to become truly competitive....
We still have some trees left in the orchard....
Let's cut them down....
And hope that somebody else ....plants more for us...
..................................
quite a few ...Quite a few .....
Educated far beyond their intelligence....
................................
Know this....
If the US govt. were to change tax structure to a simple consumption tax only....approximately 15% to be divided between Fed and stste.....this would prevent brokering tax dollars through the govt. for them to allocate....
A consumptiuon txonly...would allow the people///the actual market to allocate far more efficiently...than the govt....
Again...the challenge to politicos and economists is wide open....to prove a 15% Consumption tax only .....would be far more fruitful than what the govt. is currently doing....
This is CAKE...
Want some ?
we all laugh and scoff at what is being said, but while this is going on, they continue what they want to do, no matter what we think or say.
How about a rebuttal from the kansas city fed chief:
President of the Federal Reserve Bank of Kansas City Warns of Oligarchy
Wednesday, the head of the Federal Reserve Bank of Kansas City, Thomas Hoenig, agreed:
If I did not already think he was saying what he is saying solely for the purpose of creating the illusion of a free marketplace of ideas within the Treserve cabal, I would suggest Mr. Hoenig as someone who should take over Ben's job.
but...but... but... the "market:" says no one else can do the job. If not Ben the world ends! Or at least the stock market will fall. And we can't have that.
The stock market is the US economy. Please don't even think of anyone else except for Ben! Until Kohn can take over in 2020. Perish the thought of the market going down.
The Fed has become like Biddle's bank of the US. Corruption is rampant and politicians are on the take the same as then. We need an Andrew Jackson to call their bluff. The arrogance of the Fed is no less than Biddle's. We need to stop this nonsense NOW.
I implore the Patrician Republican elite (If there is any left) to take on these cretinous slimy turds before they have us crawling on all fours like beasts of burden.
They need to openly speak in plain language to the public about their crimes and their future plans to create a feudal aristocracy.If this does not happen soon they will have acquired a critical mass of power and their plan to create a new papacy will be complete.
Just who do you think is behind the Fed anyway?
Ooooh... pick me! The Patrician Republican elite.
You are probably right Master Bates , I guess I am beyond hope and beginning to babble
The dollar will fall ,the legions will return with the barbarians and the system will collapse
I wonder what future historians will make of these tumultuous events?
I wonder will there be future historians?
Market up, gold flat....who wants to bet the "Hati Aid" isn't sliding into the banks pockets. easy money!
I'm going to stop paying my mortage to avoid the "potentially catastrophic consequences" of giving my hard earned money to a bank
Maybe we set our sights too high.
How about END THE NEW YORK FED.
Bravissimo! Perfect! +10 (net of taxes)!
What shall we do with the building? Homeless shelter? Paintball arena? Morgue?
meth lab
I had thought the primary reason those within that structure used the thought processes they have been is because they had been using the filters from their lith production to make their coffee..
Someone should add up all the bonuses and compensation paid at these "banks" in 2008 and 2009 and compare it to the derivative CP defaults threatened by an AIG bankruptcy. My guess is that the "compensation" bill would have come close to covering the AIG default. Money is fungible. So this whole argument by the Fed is bullshit. The "system" could have easily absorbed this hit. But the "Kleptocrats" were having none of it. After all, We the People work for them now.
In the old days, when the Partners' names were on the door, they at least got wiped out like Gentlemen and they didn't expect welfare. At my old firm in 1998, we cut our pay. I know this is unthinkable now.
It's called Capitalism......
FAIL
Capitalism works quite well if given the opportunity. It's called Corporatism that is the problem......
Uncle! I have had enough. I can't take any more. This world of reality sucks!
TD, you can take your pill back! Please plug me back into the Matrix. I just can't wait for all of the wonderful things that it has to offer.
I will buy some AIG stock because it will be worth over $100/share after they pay the government back in a couple of years in the Matrix. I will buy bank stocks because they can never go down in the Matrix. I will max out my credit cards and HELOC because the mathematics of debt to equity don't apply in the Matrix. I will believe everything the government tells me beacuse lies and corruption doesn't exist in the Matrix. I will take out a jumbo loan to buy a 2 bedroom 1 bath house in San Fransisco because home prices have already bottomed in the Matrix. I will buy a REIT with a 8% dividend because commercial real estate won't crash in the Matrix. I will leverage up as much as I can because jobs, incomes, and future gorwth is assured in the Matrix. Oh, I almost forgot. Steak tastes GREAT in the Matrix too! Yummmmmmmy
Son, we live in a world that has walls, and those walls have to be guarded by men with guns. Whose gonna do it? You? You, Lt. Weinburg? I have a greater responsibility than you could possibly fathom. ...
I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very freedom that I provide, and then questions the manner in which I provide it. I would rather you just said thank you, and went on your way ...
Yeah because we really need these bankers and their fuckin debt peddling.
The end of the world because an accounting ledger says so...eff you wall street, eff you bankers.
I suspect that AIG was hiding many other nasty secrets. I suspect they had been moving assets between divisions to hide how under capitalized they were. I suspect that the AIGFP group was allowed to do its thing with little oversight as long as it was providing cash for the organization. It makes me think of Enron and how a few months prior to their collapse, they were the cheapest protection sellers in the CDS market and a few people were suspicious about this and thought maybe the were short on cash. Anyway, I suspect the Fed realized that if they did not intervene but allowed AIG to go bankrupt, the winding-up would reveal too many truths about the dishonesty of management and the weakness of auditors and regulators. Letting AIG fail risked exposing how illusory the profitability of the insurance industry is and by implication, most of the economic system. If this had been your world, then it may well have ended.
A compilation of traits of a sociopath.
It's time we just call a spade a spade. How much more abberant behaviour do we need to see before we recognize the true nature of these people? Megalomaniacs indeed.
"Only rarely in difficulty with the law, but seeks out situations where their tyrannical behavior will be tolerated, condoned, or admired"
Microsoft is hiring.
Met a builder this lifetime. Name was Bill kind of like warren buffet. His stated ideology was find good people and use them. I found the hook on the acceptance thing. He doesn't mind screwing you over but if you aren't Ok with being screwed over he gets really really nervous.
Deal with alot of sociopths in my dream life. They hate it when you won't respect or show gratitude. One situation they sent one and she kept trying to set up manipulative scenes in the dream. I kept busting every single scene of the dream. She was HORRIFIED. It's no so much as justification as it is a completely inability of desire to change or adopt another strategy. They know they can never justify properly so they are trying to settle for customizing. It's ok that it's not just as long as it's a custom and ingrained and adopted over time. If they can get you to mimmic small transgressions and by flooding you with sympathetic projections that you can't control it's even better.
You can't really know one entirely until you get the full surveilance treatment. Which we don't get much of in the US but the do alot in other parts of the world. Spending hours and hours and months and months and years and years surveiling people who are innocent of any wrong but are simply deemed a threat to them that they need to study to figure out how to identify weaknesses.
Their only weaknesses are hate/repulsion. Complete lack of acceptance desire to NEVER show acceptance. Desire to use abusive behavior for an enternity to drive them away really gets under their skin as it's uncontrollable on action reaction. But yes thier "life plan" is unrealistic. They can't set ups a society or a world or a system where they are able to lie and manipulate without it spreading and being used against them. All you have to do is just sit and put out a I FUCKING DEMAND information aura at them or I'M NOT TELLING YOU SHIT and it will make them insta poof.