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The Stench Of Freddie Mac Is Back - An $18 Billion Spree Of Crony Capitalist Thievery

Tyler Durden's picture




 

Submitted by David Stockman via Contra Corner blog,

Washington’s capacity to foster crony capitalist larceny and corruption never ceases to amaze. But according to Bloomberg, Wall Street’s shameless thievery from US taxpayers is about to get a whole new definition.

To wit, Freddie Mac is handing three private equity billionaires deeply subsidized debt financing in order to undertake $18 billion in rental apartment deals. According to no less an authority than Morgan Stanley, the subsidy embedded in this cheap financing amounts to 150 basis points or roughly $150 million per year on the loan amounts in play.

Yet this largesse will serve no discernible public purpose whatsoever. Indeed, over the 10-year term of these loans the bonanza will amount to billions, but it will not generate a single new unit of housing. Nor will it provide a single dollar of incremental rent relief to any low or moderate income tenant.

That’s because the purpose of these giant loans is not to fund new construction of rental housing—– for which there is currently an arguable shortage. And it’s not even to incentivize owners to convert existing apartment buildings to so-called “affordable” housing.

Instead, its sole effect will be to put the taxpayers in the business of  highly leveraged Wall Street deal making. That is, it will fund what amounts to apartment company LBOs being undertaken by the largest players in the private equity world including Barry Sternlicht’s Starwood Capital Group, Steve Schwarzman’s Blackstone Group and John Grayken’s Lone Star Fund.

Each of these cats are billionaires many times over and their remit most definitely does not include bolstering the social safety net. What they are doing is buying giant apartment companies in high priced takeover deals. These LBOs will shower sellers and speculators with windfall gains, and Wall Street dealers and themselves with prodigious fees now and the prospect of pocketing double, triple or quadruple their modest cash equity investments not too far down the road.

Freddie Mac, of course, is the one and same crony capitalist monstrosity that helped push the US financial system to the brink in 2008. If Washington had any common sense and gumption at all, it would have taken it out back and shot it years ago.

But the K-Street lobbies kept it alive during the dark days after the crash and have now invented a new mission to purportedly facilitate affordable rental housing. But that’s a crock, and the true purpose could not be more blatantly obvious than in the three deals described in the Bloomberg article.

Thus, Freddie Mac will loan the Lone Star Fund $5 billion to finance an LBO of Home Properties. Folks, the latter is a rental housing REIT that is publicly traded, more than adequately financed and in no need of help from the nation’s taxpayers whatsoever. In fact, it already has about $2.4 billion of plain old market debt.

But it can be well and truly said that the punters and hedge funds which own the stock have made out like bandits. Its share price has tripled since the March 2009 bottom, but more importantly, was up by 35% just in the 18-months prior to the June 2015 LBO announcement.
HME Chart

HME data by YCharts

Did Home Properties earnings take-off in the last year or so, thereby warranting the stock price surge shown above?

No they didn’t. During the 12-months ended in June 2015, Home Properties earned $177 million or 4% less than the $185 million of net income it posted two years earlier for the June 2013 LTM.

So here is what was accomplished by putting US taxpayers in harms’ way in this instance.

A rental housing REIT with more than 100 communities and 40,000 apartment units, and which currently is comprised of about 30% “affordable” units under Freddie Mac’s elastic definitions, has been shuffled from public to private ownership.

The transaction was accomplished at the bubble era price of 25X net income—–a vastly inflated valuation which had been reached in June and which reflected the fact that the fast money boys had earlier piled on for the rumored takeover ride.

Yet without Freddie Mac’s funding of the takeout at this absurdly inflated price, the arbs and speculators who sold their stock into the recently completed deal would not have had a snowball’s chance of retaining their winnings.

That’s some public policy accomplishment, and its all there is.

Its proud new billionaire owner won’t be required to add a single additional unit of so-called “affordable” housing, and that term doesn’t mean much anyway. Freddie Mac’s definition includes about 60% of US households!

Well, there is one aspect which has changed, and not in a good way. What was a public REIT with $4.4 billion of equity market cap and $2.4 billion of debt has become a private LBO with $5 billion of debt and a deal fee tab in the order of $300 million.

As to the latter, it was some kind of Wall Street feast. Yet all of the deal commotion implied by this listing amounted to dead weight cost to society. This pointless LBO deal never would have happened on the free market:

BofA Merrill Lynch acted as financial advisor to Home Properties. BofA Merrill Lynch and Houlihan Lokey provided fairness opinions to the Home Properties Board of Directors in connection with the transaction. Goldman, Sachs & Co. acted as exclusive financial advisor to Lone Star. Hogan Lovells US LLP acted as legal advisor to Home Properties. Gibson, Dunn & Crutcher LLP acted as corporate legal advisor, Hunton & Williams LLP acted as real estate legal advisor, and Skadden, Arps, Slate, Meagher & Flom LLP acted as tax legal advisors to Lone Star Funds. Sidley Austin LLP acted as legal advisor to BofA Merrill Lynch, and Cleary Gottlieb Steen & Hamilton LLP acted as legal advisor to Goldman, Sachs & Co.

In other words, the fools in Washington have descended so far down the rabbit hole of “help for housing” that they have managed to double the debt on these 40,000 rental units in order to cash out public equity investors who had no claim whatsoever to taxpayer support. Oh, yes, and to pay enormous fees to the deal banker, Goldman Sachs, which by all rights should be paying back taxpayers for its 2008 bailout, not scalping them yet again.

But when it comes to lunacy in the rabbit hole nothing comes close to another deal mentioned in the article—— the $5.3 billion LBO of Stuyvesant Town-Peter Cooper Village by Blackstone. It appears that Freddie Mac will provide $2.5 billion of the takeover financing, meaning the annual subsidy will be in the order of $40 million.

Let’s be clear about “Stuy Town” as its called. It has absolutely nothing to do with poor people or any plausible notion of a social safety net. It is a monster housing complex on the lower east side of New York which encompasses 80 acres, 11,000 apartment units and upwards of 35,000 middle class inhabitants—–a good sized city in most of America.

 

It also happens to be ground zero for one of the more spectacular housing debt crashes last time around. It had been a $5.4 billion leveraged buyout in 2006 by Tishman Speyer and a BlackRock fund.  The deal predicate was that this legendary rent-controlled complex originally built by MetLife for returning servicemen after WWII would slowly return to free market pricing as grandfathered tenants passed away or moved on.

But the Greenspan credit bubble expired before the rent-protected tenants did or before mysteriously failing heating, plumbing and electrical services could induce enough of the remaining rent-protected tenants to move along on their own two feet in order to make the pro forma financials work.

Not surprisingly, the deal blew sky high during the financial crisis and resulted in billions of losses for the mortgage lenders. For the past five years it has been operated by a consortium of creditors whose foolish investments in this fiasco deserved no quarter whatsoever from the nation’s hard-pressed taxpayers.

Indeed, as time passed the creditors consortium had become desperate to find a mullet stupid enough to buy them out at a premium to their written down loan values, but the going was exceedingly tough. After all, the giant complex was still financially radioactive after upwards of $3.5 billion of losses from the 2006 LBO.

Moreover, additional headwinds arose from the fact that Stuy Town is a perennial object of local politicians demagogueing on behalf of “affordable” housing.

Then again that’s why we have oily politicians like Senator Chuck Schumer. As a real estate industry publication described it,

Their proposal was almost the exact opposite of Tishman Speyer’s 2006 bid: They would take on little debt and keep the apartments as rentals, eyeing steady returns instead of swift profits. And they deemed it essential to win over the city, tenants and local politicians — perhaps in part to New York’s senior senator, Chuck Schumer.

 

At a tenant meeting at Stuy Town last week, Schumer said the Tishman Speyer saga had taught him the need for “outside leverage.” “And I found a way,” he added. “I realized that to get such a huge mortgage, you need the backing of Freddie Mac and Fannie Mae.

So here is what’s going to happen. The busted lenders to the 2006 deal are going to make a killing by getting $5.3 billion for positions which are not remotely worth that.

At the same time, Blackstone will get subsidized financing from Freddie Mac, $225 million worth of benefits from New York City through an additional loan and uncollected taxes and the rights to sell the complex’s 700,000 square feet of air rights, which could be worth hundreds of millions.

Why all this largesse?

At the end of the day it will mean that a mere 500 units out of the 11,000 will be reserved for families making no more than $62,000 per year, and another 4,500 for families making up to $128,000 per year.

That’s right. The taxpayers of America are being dragged into a $5 billion LBO on the very site where an identical one blew up less than seven years ago—–purportedly to help families that are in the top 10% of income earners in the nation.

Needless to say, there is a simple alternative. Abolish Freddie Mac, Fannie Mae and all the rest of the Washington’s crony capitalist machinery and turn housing finance over to the free market where it belongs.

If there are citizens in need who can pass a means test and can’t work owing to age or genuine disability give them cash to fund their own shelter choices. And if they are able bodied and willing to work, top up their wages with earned income tax credits or similar cash transfers.

But let’s stop being stupid. Blackstone is not the United Way.

 

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Thu, 11/12/2015 - 14:24 | 6782982 One And Only
One And Only's picture

Crony capitalism is a euphemism for fascistic economics. 

General characteristics of fascist economies:

An inherent aspect of fascist economies was economic dirigisme,[4] meaning an economy where the government exerts strong directive influence over investment, as opposed to having a merely regulatory role. In general, apart from the nationalizations of some industries, fascist economies were based on private individuals being allowed property and private initiative, but these were contingent upon service to the state

 

https://en.wikipedia.org/wiki/Economics_of_fascism

Exactly what we have in America today. Congratulations citizen.

Thu, 11/12/2015 - 15:01 | 6783177 BC6
BC6's picture

Lost a bundle on SRS years ago on manipulation and time decay. Fuck these fucking fuckers.

Thu, 11/12/2015 - 15:15 | 6783247 Stuck on Zero
Stuck on Zero's picture

Gosh. No wonder why the poor cost so much.

Thu, 11/12/2015 - 15:18 | 6783260 RaceToTheBottom
RaceToTheBottom's picture

Time for more Accounting changes.  This traceability stuff is for the birds...

Thu, 11/12/2015 - 15:44 | 6783378 doctor10
doctor10's picture

the only way to deal with Crony Capitalism is to dissolve the favorable geographic nexus of K St. and Fed.Gov

 

Make the congresscritters and Senators stay ain their districts and meet electronically.

at home their constituents can see daily whom they are meeting with and whom they ar eplaying with

The Kst Lobby that has cordinated the raping of America for 60 years wold dissolve oevernight.  As would the threat of terorrism.  Can't bomb a government spread throughout 50 states. 

All of our freedoms would be improved

Thu, 11/12/2015 - 14:23 | 6782985 Elliptico
Elliptico's picture

Tishman Speyer fuckers!

Thu, 11/12/2015 - 14:25 | 6782990 KnuckleDragger-X
KnuckleDragger-X's picture

That's not a stench, that's the new perfume "Eau de Crony", now in gallon jugs.....

Thu, 11/12/2015 - 14:28 | 6782998 buzzsaw99
buzzsaw99's picture

the usual suspects

Thu, 11/12/2015 - 14:47 | 6783103 Ban KKiller
Ban KKiller's picture

Wimington bank/trust. Buying up three huge tranches of defaulted debt at least three years old. Moving in to foreclose on folks with a "Brand New" plaintiff. 

Christiana Trust, aka, lying sister fuckers. 

Thu, 11/12/2015 - 14:33 | 6783024 cn13
cn13's picture

We are not only the most evil country on earth, but also the most corrupt.

Sad days for Amerika.

Thu, 11/12/2015 - 14:33 | 6783025 PhiBetaZappa
PhiBetaZappa's picture

SOSDD - move along, nothing to see here.

Thu, 11/12/2015 - 14:35 | 6783034 Bangin7GramRocks
Bangin7GramRocks's picture

You know what's amazing. They must have gotten not just a wink and a nod, but an absolute guarantee against prosecution. These Ivy League pocket pussies wouldn't commit such obvious crimes against their country if there was even a chance of prison. Treasonous!

Thu, 11/12/2015 - 14:38 | 6783048 SSRI Junkie
SSRI Junkie's picture

nothing happens without congressional and presidential approval (and freedom from insider trading laws)

Thu, 11/12/2015 - 17:00 | 6783812 TheReplacement
TheReplacement's picture

Congress and the President don't do anything without the approval of the Iron Bank.

It isn't the politicians you idiots.  If it were, voting WOULD matter and WOULD change things.  Voting DOESN'T matter and DOESN'T change things.

Why?  The politicians don't matter.  They only shift the crumbs from one group of cronies to another.  The real juice goes to the bank.

Fuck man.  Wake up.

Thu, 11/12/2015 - 21:57 | 6784552 SSRI Junkie
SSRI Junkie's picture

#ReplacementsDontMatter

Thu, 11/12/2015 - 14:38 | 6783051 blindman
blindman's picture

they know what they are doing.
""Behind the ostensible Government sits enthroned an invisible Government, owing no allegiance and acknowledging no responsibility to the people. To destroy this invisible Government, to dissolve the unholy alliance between corrupt business and corrupt politics, is the first task of the statesmanship of the day."

Theodore Roosevelt, The Progressive Platform

"As societies grow decadent, the language grows decadent, too. Words are used to disguise, not to illuminate, action: you liberate a city by destroying it. Words are to confuse, so that at election time people will solemnly vote against their own interests...

Any individual who is able to raise enough money to be considered presidential is not going to be much use to the people at large. He will represent whatever moneyed entities are paying for him. Hence, the sense of despair throughout the land as incomes fall, businesses fail and there is no redress."

Gore Vidal, The Decline and Fall of the American Empire, 1992

"Last year, pressed by progressive donors at a dinner party to act more like the progressive they thought he was, Obama responded sharply, 'Don’t you remember what happened to Dr. King?'”

Ray McGovern, Doubting Obama's Resolve To Do Right" jca
10 NOVEMBER 2015

Deep State at Home and Abroad: Mike Lofgren and David Talbot.
http://jessescrossroadscafe.blogspot.com/2015/11/deep-state-at-home-and-...

Thu, 11/12/2015 - 15:22 | 6783274 blindman
blindman's picture

here is the difference that makes a distinction.
o-man is neither a doctor nor a king, he is the president
of the usa. he should have said "don't you remember
what they did to j.f.k." it is not his african american
gene pool mixture or solution, nor his kingly signing
statements but his elected/selected position in a defunct
constitutional, ocean away, european political sock
puppet of old funny money finance image that he
would like for you to "see". the image, not the
reality. the color, not the structure. the feeling,
not the finance.
.
it is a different but related discussion that
is long openly and essentially overdue.
no?

Thu, 11/12/2015 - 14:39 | 6783055 Insurrexion
Insurrexion's picture

 

 

David, David, David,

Stop bitching.

We love you, but it is not very manly, or sexy to be a simple Blog Bitch that lacks an action plan. It makes matters more frustrating when we all know that the status quo (you so elequently bitch about) could give a fuck about your, or our opinions. They laugh and point at us.

However, I have between my large, and sweaty teutonic breasts a smokin' AK47. I will be the one pointing and laughing last.

What is your plan David?

 

 

Thu, 11/12/2015 - 14:58 | 6783164 JRobby
JRobby's picture

They will continue to steal using the tricks that fruadsters know unless the "correct punitive action" is taken.

The courts will not invoke these actions. So

Thu, 11/12/2015 - 15:26 | 6783286 The Most Intere...
The Most Interesting Frog in the World's picture

Your point is well taken but running head long into a SWAT team or federal agents with an AK-47 will not do you, or anyone else that is like minded, any good.  Again, we get your point, but David has a role. let him fill that role.  The Tea Party has their role.  Ron Paul has his role.  David Brat had his role, now he has a new role.

Nobody does things at the end of a barrel anymore.  If they do their success is short lived.  They do it through government.  You eliminate the concentrated power inherent in big government you will enhance opportunities for the common man and eliminate the massive inequality that now exists.

Milton Churchill

Thu, 11/12/2015 - 17:23 | 6783895 NuYawkFrankie
NuYawkFrankie's picture

re Nobody does things at the end of a barrel anymore.

Ever heard of USSA "Foreign Policy" ?

Thu, 11/12/2015 - 18:43 | 6784301 Demdere
Demdere's picture

https://thinkpatriot.wordpress.com/patriot-games/

I think it is a waste of effort to oppose "the system" until you can push it over with a feather tap.  That is close, IMHO.

Our central government cannot win a war with its citizens.  Governments with much less well-armed citizenry in poor cultures, ones without the vast power that can be so easily turned to harm, lose against their citizens.  Countries are devastated in the contest, look at Syria.

I think it is wise to be prepared to defend yourself, to have your neighbors prepared to help defend the neighborhood, and to be prepared to survive some period without anything moing in or out of your town.

https://thinkpatriot.wordpress.com/2015/11/11/dynamics-of-national-colla...

https://thinkpatriot.wordpress.com/2015/11/10/a-measure-of-propagandas-p...

Nobody can predict the future, but we can know that most people's predictions of the future are far too optimistic and underestimate the frequency of large events.  My read of this situation says 1929 hubris ** Dunning-Kruger.

Thu, 11/12/2015 - 20:17 | 6784593 Insurrexion
Insurrexion's picture

Milti,

No one is fucking running into a SWAT team.

What "government" are you talking about?

Iceland? Ok, you have a good point.

Germany? Nein. They are vassel lap dogs for the U.S.

The U.S.?

Ever heard of... Too Big To Prosecute? TARP? NSA? FBI? DHS? CIA? Whistleblowers being suicided? Edward Snowden? Occupy Wall Street? Chelsea Manning?, Julian Assange?, the Office of Naval Intelligence office at the Pentagon on 9/11? Daniel Ellsberg? Karen Silkwood? Michael Ruppert? Harry Markopolis? Karen Kwiatkowski? Jesselyn Radack? William Binney? J. Kirke Wiebe? Edward Loomis? Sibel Edmonds? Joe Wilson? Richard Convertino? Joe Darby? Russ Tice? Thomas Drake? Thomas Tamm? Gary J. Aguirre? Mark Klein? John Kirikou? Linda Almonte? Carmen Segarra? David P. Weber? Ben Strickland? ...

I know I have left out many more, and I apologize for that.

Milti, each one of these American patriots tried your "go through government channels" approach and they got their ass handed to them on a indictment plate. While I appreciate your pacifist dream land with rainbow colored fucking unicorns, it is not a real place.

The list above is the real place, with real people with real "Made in America" shit on their heads.

So please wake-the-fuck-up soldier, you are an embarrassment to your last name.

Thu, 11/12/2015 - 14:45 | 6783092 yogibear
yogibear's picture

LOL, huge bonuses for fraud. 

TARP #2 is on it's way.

Replay the Hank Paulson screenplay regarding tanks in the streets.

Thu, 11/12/2015 - 14:45 | 6783093 moonmac
moonmac's picture

Those who loan out money foolishly deserve to lose it and deadbeats should be labeled as such. It was a great system until gubbermint idiots tried making it better. Now both the fools and welchers get bailed out!

Thu, 11/12/2015 - 15:23 | 6783276 g speed
g speed's picture

fools and welchers---just another name for gov't and banks----

Thu, 11/12/2015 - 17:44 | 6784045 moonmac
moonmac's picture

All the welchers in my hood that lived rent free for 6 years are finally getting kicked to the curb. I can't imagine how much money I could of saved living rent free for that long! You're welcome deadbeat assholes!!!

Thu, 11/12/2015 - 14:47 | 6783109 bankonzhongguo
bankonzhongguo's picture

It gets worse as these projects are specially being built to house Syrian "refugees" and every other welfare draining criminal constituency.

The government needs places to fit another 30 million people over the next 10 years and Wall Streeters are going to be there to profit.

The real swamp will be smaller communities with no job prospects and no political power. 

These out of the way areas will be ground zero for new tenements and an internal erosion of American society.

 

 

Thu, 11/12/2015 - 14:51 | 6783122 Xatos
Xatos's picture

"To wit, Freddie Mac is handing three private equity billionaires deeply subsidized debt financing in order to undertake $18 billion in rental apartment deals."

 

Myself and another ZH user discussed this just the other day. I believe his name was Walter, who mentioned this very thing taking place. Pretty in touch community we have around here :)

Thu, 11/12/2015 - 14:56 | 6783156 WTFUD
WTFUD's picture

The heady stench of Goldman Sachs. They're a cancer that's spread throughout the universe but wont die! Kill them and 75% of the world's problems disappear. They're the financial arm of everything that's EVIL.

Thu, 11/12/2015 - 14:58 | 6783166 MadVladtheconquerer
MadVladtheconquerer's picture

"Pleased to meet you; hope you guess my name;

I rode a tank
Held a general's rank
When the blitzkrieg raged
And the bodies stank."

Thu, 11/12/2015 - 16:40 | 6783702 SmedleyButlersGhost
SmedleyButlersGhost's picture

Great tune. Whenever I hear or see a reference to it I have to ask- who are the Troubadors who got killed before they reached Bombay? Every other reference is to real people or events so what is that all about?

Thu, 11/12/2015 - 15:00 | 6783183 Consuelo
Consuelo's picture

"But let’s stop being stupid. Blackstone is not the United Way."

Yes, but it's the Usury way - which today means, the only way.

Thu, 11/12/2015 - 15:34 | 6783327 Hohum
Hohum's picture

Yes, but no Freddie and no Fannie and everyone who wants a mortgage needs to pay 20% or more down.  Will the sheeple like that?

Thu, 11/12/2015 - 15:40 | 6783355 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

Could you please revise the title of the article to be....

 

The Putrid, & Revolting, Stench of Freddie Mac is Back:

 

thanx

Thu, 11/12/2015 - 15:47 | 6783393 83_vf_1100_c
83_vf_1100_c's picture

  How does one go about becoming a crony? I want to be rich.

Thu, 11/12/2015 - 15:55 | 6783431 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

I think you have to travel to The Crossroads and have a chat with a guy named Lucifer aka 'Satan', or 'The Devil', who will want you to sign a contract first.

 

Good luck with that, eh.

Thu, 11/12/2015 - 18:27 | 6784241 Mr. Universe
Mr. Universe's picture

Exactimundo.  The way Baal has public relations nailed down they don't even need people under contract much anymore, they willingly serve because it's the new "right thing to do".

Thu, 11/12/2015 - 16:07 | 6783493 Skeeterworborton
Skeeterworborton's picture

This will go on as long as we let it...nothing like a warm uzi

Thu, 11/12/2015 - 16:25 | 6783610 22winmag
22winmag's picture

The stench never really went away.

 

I remember reading fanniewatch online 15 years ago when they were ringing the alarm bells.

Thu, 11/12/2015 - 16:48 | 6783747 Demdere
Thu, 11/12/2015 - 17:03 | 6783825 csmith
csmith's picture

"...but it will not generate a single new unit of housing."

Not designed to. All the cheap financing and free money is meant to prop up the prices of EXISTING real estate for as long as possible, to keep the fiction of "recovery" going...

Thu, 11/12/2015 - 17:19 | 6783917 nobodysfool
nobodysfool's picture

Unshackle the Gunny Sargeant (Mark Wahlberg)...

"For the record, I don't like the way this turned out any better than you do.  But this is the world we live in, and justice does not always prevail. But this isn't the wild west where we can clean up the streets with a gun....even though sometimes that's exactly what's needed...

Thu, 11/12/2015 - 17:25 | 6783941 Kirk Lazarus
Kirk Lazarus's picture

The implicit guarantee of the loan by Freddie Mac benefits the SELLER of real estate, not the BUYER.

And at the local levels, more affordable units are going to be preserved underl this transactions. Middle class people in New York will retain rental units. Why is that a bad result? And the Buyer takes some risk that they bought at the peak. Sounds like pure capitalism to me.

Nothing wrong with this sort of deal.

Thu, 11/12/2015 - 17:59 | 6784115 Wilcox1
Wilcox1's picture

Was this deal made in Congress somehow? How would this get put together?

Thu, 11/12/2015 - 18:57 | 6784341 hangemhigh77
hangemhigh77's picture

Just hang all these treasonous crooked motherfuckers

Thu, 11/12/2015 - 19:23 | 6784426 yellowsub
yellowsub's picture

How many of the recently promoted MD at GS were part of this deal?

Thu, 11/12/2015 - 20:45 | 6784678 JOHNLGALT
JOHNLGALT's picture

So we’ve got all the usual suspects out there calling for a rate rise, Yeah, do it, please do it, please do it. These imbeci**s obviously don’t know sh** from cl*y.  Do we have to put up with this crap for another month?  NO WE DO NOT HAVE TO. We need to tell them (“THEM”) to “DO IT” no more “DATA SIGNALS”. The last time the markets gave the FED data signals the ass fell out of the markets and they S*** themselves.

If the FED raises interest rates it will strengthen the already strong DOLLAR and strangle your exports, thus contracting your economy and sending it into a DEPRESSION.

 

 The U.S. has wonderful numbers,  What is the score now, About 60% on food stamps, (whatever that is). Sounds like a socialist utopia HEH, HEH, HEH.  In Australia it is called the New Start Allowance. We in AUSTRALIA call it the No Start Allowance because it is just a way to hide the true unemployed and give them a subsistence allowance and keep violence off the streets. My sympathies to all of you in the U.S.A. who believed in the “DREAM” of home ownership and independence.  

 

To anyone who would like to get out of this PONZI scheme there must be a precious metals store nearby.

 

There is a choice of keeping your life’s labour in airy fairy paper (“PET PAPER”) in which most of the thieves have told you they want to steal (through inflation) at least 2% of your wealth from you.

– If there is deflation you get to keep most of your work (value), If there is the thieves inflation, they get to skim the 2% or whatever off the top,  DO NOT FORGET THAT “THEY” CAN TURN ON THE SPIGGOTS TO 10% OR 20% OR WHATEVER and just steal that amount of your life’s work from you.

Or you can convert your excess labour into HARD OBJECTS,

LAND, (can be taxed),

BUILDINGS, (can be taxed),

CARS, (can be taxed and subject to depreciated value),

ART OBJECTS, (subject to personal preferences),

BUSINESSES, (usually valued in (“PET PAPER”) and subject to the honesty of management, ETC.)  YEAH, RIGHT.  We know all about that don’t we?

Getting back to the difference between “PET ROCKS” and “PET PAPER” and now – wait for it – “PET DIGITALS”.  I nearly p****d myself when I heard you can give up your life’s work to (invest) in “PET DIGITALS” HEH, HEH, HEH.  _YEAH RIGHT.

Give me a break. Do you think I’m a complete F*** W***.

Sorry about the rant folks, but you seem to give a few others a bit of leeway, and it was a good bottle of Muscat liqueur

As far as investing in “PET ROCKS” or “PET PAPER” or “PET DIGITALS”, maybe you should ask the _Indians, Chinese, Russians, Germans (sorry you can have your GOLD back in ??? years) _because I am not licensed  to give investment advice.

 

I loved to spill my guts after only 6 months of posting. Best to you all _JOHNLGALT

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