Wednesday, January 12, 2011

The Fed - Bailing Out Every Bankster, but.......

Long story short.... The Treasury dept. - WITH YOUR MONEY - is giving 300 billion to a PRIVATE bank, called The Federal Reserve Board (who prints money to bail out other private banks), and when the Federal reserve board LOSES ALL OF THAT MONEY (they're down to a few billion), the Treasury gives them even more OF YOUR MONEY.

Further, the Treasury is only allowed, legally, to bail out The Fed to 100 billion - that law, like so many others, is being completely ignored. But hey, its only 200 billion in taxpayer money that's being wasted. No big deal. You can afford it, after all. Its not like you have your own bills.











Friday, January 07, 2011

Tuesday, January 04, 2011

Recovery? Please.

Bottom line: THERE IS NO "RECOVERY."

A few years ago we had a massive banking and credit crisis. In fact, it wasn't much of a 'crisis' if you ask me. It was a natural economic cycle. Economic cycles work in years and many times even decades. This is the nature of them. Ask any serious economist. There have been decades of lopsided growth, contraction and outright booms in economies before, all over the world. Its the nature of men and markets to expand to meet demand for goods and services, and typically they over-expand. For the past 20 years credit expanded and a few years ago that came to an end. That's just economics. Its happened before and I'm sure it'll happen again. The important point is that its over. It was in place for a long time but now overall credit is shrinking, not expanding. For you mathematical folks, what's happening is called "reversion to the mean." Basically, our credit and banking system became too large and over-sized. The system was out-of-balance and is now righting itself.

Well, it tried to right itself. It would've corrected the imbalance in a matter of weeks and the economy would've gone back to organic recovery. Instead, the Federal Reserve Board stepped in to save the gambling, swashbuckling banksters and their friends to the tune of some 12 trillion dollars to keep the ponzi scheme afloat. But of course, this was done in the name of saving "the system," and by extension.... you and me?

That last part is the problem. Bailing out the banks, foreign banks, hedge funds, pension funds and every other squealing gambler does NOTHING for you and me. NOTHING. Your debts are due. Period. Best thing for you to do is refuse to pay any bank that was [illegally] bailed out. That includes all top-four big banks: Bank of America, Citigroup, Wells Fargo and JPMorgan Chase. Your debt will be a total loss for the bank that they must right off. Your debt will be sold to a debt collection agency for 25 cents on the dollar who will try to talk you into paying with empty threats. Then your debt will be sold for 15 cents on the dollar to another agency who will do the same thing. If after 6 years (less or more depending on your state), the statute of limitations runs out and your debt is considered free and clear. Any effort to collect it after that is null and void, regardless of what the collector demands or claims. Period. That is the law. I guarantee banksters are at this very moment trying to convince states to change these laws to 25 years or more, but for now it is what it is. If you did this, yes, your credit score would be pretty bad and you wouldn't be able to use any credit cards that didn't carry really steep interest rates for a while, but so what. Declaring bankruptcy is worse, as your debts will not be discharged. Since "they" "reformed" bankruptcy, you have to pay the bulk of your debt back over a period of time, in essence rendering you a debt slave. You're better off negotiating with a second or third-level collection agency. After all, they paid 15 cents on the dollar for your debt. If they can collect $2,000 out of $10,000, they will be making money.

There are no bailouts in capitalism. That is something the "regulators" and "authorities" will never tell you. First off, the "regulators" and "authorities" are all former Wall St. people who intend on working there again - this is common knowledge by now. Secondly, these people will never tell you they never had to do anything when the big banks got in trouble. The whole banking system would've resolved itself with not one taxpayer nickel. The bad banks go under, their bad loans are bought by banks that are not in trouble and then IF - that is, IF, there are people or businesses that are good credit risks that need loans, the small and medium banks that expanded into the place left by the large, failed banks, will make those loans. The derivatives trade, mortgage-backed securities and other packaged, high-risk rubbish would've been sold off for the pennies on the dollar is was worth and the Wall St., passing-paper economy that resulted in outrageous bonuses would've collapsed, but Main St. would've gone on as usual. After all, Main St. America does not get their small business loan from Goldman Sachs. This much should be obvious.

None of this would cost you and I one nickel. But of course "we" could not "let" that happen because it was "bad" for... "us." That is a complete lie. There is no direct trace between Wall St. and Main St.. If anything, your loan from Wells Fargo, BofA, or JPMorgan Chase, should it be liquidated when the bank collapsed, would be sold for less than it was worth in all likelihood. Probably 70 or 80 cents on the dollar if you typically pay at least your minimum balance on time. If you don't, it would be sold off for much less... as little as 25 or 30 cents on the dollar. In that case, the new owner of your loan would only have to recoup half of your debt with them to make a good profit. You win, they win.

But "we" couldn't "let" that happen, even though that is how free markets have been dealing with such problems since time began. No, "we" needed to save the "banks." Banks that of course, demanded your debts bank at once as they were still insolvent. How nice for them that "we" saved them from collapse... Question: How can you save someone who has already collapsed? You can't put a volcano back together after it has erupted and yes, this is pretty much the same thing... Once a bank is known to be insolvent, other banks won't do business with it for all the tea in China. And since we have 4 HUGE banks that STILL have Trillions in bad loans (nicknamed "toxic paper"), those banks will be bleeding money for years and years, even with bailout money. This is also common knowledge among finance folks. So with no loans to make (the economy is still in very bad shape) and no mortgages to package and sell-off for fat fees, what did the banks do to keep from going out of business?

Lied.

They basically lied, lied, and lied some more. They dumped all the bad loans they could onto The Fed and the rest they threw into a bucket on their balance sheet called "Level 3 assets." That's supposed to mean, those assets are hard to value and typically contain really esoteric and odd securities or assets. Its pretty much a very small accounting category every bank can use that has a relatively small number in it. But in this case, it was the perfect loophole. Level 3 was immediately saddled with mortgage and credit card loans. Those NEVER get thrown into Level 3 - because they are not hard to value and never have been. The problem is that those things were now worth a fraction of what they used to be worth, and the only way to hide that, in a panic, is to slap them under "Level 3." The "regulators" should've balked at this and demanded those loans be taken out of "Level 3" and properly valued - REGARDLESS of their value. But this made our banksters sad :( and would've shown the massive losses they had hidden, so "we" couldn't force them to do that. So the bankers sit around and wait for their collapsing loans that no one is paying (called a non-performing loan or NPL), to be completely worthless and in the meantime they pray and demand more free money from the Fed to try to make money with... usually in HIGHLY non-banking types of ways... like buying stocks, bonds, commodities (oil, gas, soybeans, wheat, etc.) to profit from the rising prices abnormally low interest rates are causing (generally called "inflation"), and basically drive up the cost of everything you need and consume. "We" must let "them" do that to us as "the banks must be saved at all costs," we are told.

After all, its good for 'our' economy.

If you suspect the rising of prices (without additional demand from consumers) butchers the economy and kills your discretionary spending on other things like gadgets, cars, clothes, toys and all things that make the economy grow, then you would be right. But screw you. That's Wall St.'s attitude. They have their own problems. And while they laugh about the public's ruination for their profit, they only watch in horror as time passes, knowing the banks are still bankrupt, and now entire nations, having brought billions in bank debt onto their own books, are the next to fall.

Nations don't fall. Power brokers in National capitals with HUGE egos don't go home with empty pockets to tell their wives their bad decisions helped bankrupt the nation and now they will have to get real jobs to feed the kids. Not with unofficial unemployment at 18%. Yikes. Who would want to look for work now!?!?!?! Being King is a much better gig.

So Nations will next war with each other. After all, if you don't distract people from asking questions about why the banks need TRILLIONS in permanent bailout funds, you might not get reelected anyway and your friends in "finance" might lose the gravy train you have made for them. So its "defend 'our' country" and a call to arms. 'We' have to kill some 'bad' people to defend 'our' nation. Who will we kill? It doesn't really matter. They'll make something up. A shot is fired, someone fires back, etc. etc.. It'll be shoot first and ask questions later. Even more so with all the countries in massive debt and no way out.

There IS NO COLLECTION AGENCY FOR NATIONS.

You should be pretty disgusted by now. So get ready. Instead of going to war, perhaps there is a better solution for 'our' nation.

Revolution.

Sunday, January 02, 2011

THE POOL WE LIVE IN IS DARK

http://www.nytimes.com/2011/01/02/business/02speed.html?_r=3&pagewanted=1&ref=business

As it has grown, Direct Edge and other new venues have sucked volumes away from the Big Board and Nasdaq. The N.Y.S.E. accounted for more than 70 percent of trading in N.Y.S.E.-listed stocks just five years ago. Now, the Big Board handles only 36 percent of those trades itself. The remaining market share is divided among about 12 other public exchanges, several electronic trading platforms and vast so-called unlit markets, including those known as dark pools.

Think about this for just one second. Stocks listed on the New York Stock Exchange are only traded on the exchange itself 36 percent of the time? What on earth is going on? Where is the bulk of the trading taking place if not on the regulated, public exchange? Other exchanges and.. unlit markets? What the hell is an unlit market? Does that sound like a good thing to you? Dark Pools? Do you know what that means? It means that the trading - 70 percent of it - is being done off an exchange. Do you, dear reader, know the purpose of an exchange!??!?! Its to ensure that all the people trading on it are doing it with real money, with real collateral for the contracts they have entered into. So if I sell someone a stock, the exchange verifies with my broker that I really have the shares. Or if I sell a stock 'option' - a type of bet based on a given stock and its price, that I have enough money to cover that sale, should the price move against me.

Given that some stock option sales have virtually UNLIMITED EXPOSURE and RISK (see selling naked), I find it to be QUITE REASSURING that SEVEN OUT OF TEN trades, trades of UNKOWN TYPES AND AMOUNTS are taking place EVERY SINGLE DAY in the middle of a global credit and currency crisis on no exchange with zero transparency into them. With no exchange, we have no idea what the prices are. With no price discovery of ALL trades and stocks at ALL times, the actual price of every stock is in great doubt. Do tell me, dear reader, HOW CAN WE KNOW EXACTLY HOW MANY TRADES and IN WHAT AMOUNTS are taking place in dark pools if they are not traded on a PUBLIC exchange? Or perhaps this is why we are having sudden "flash crashes" of stocks on a microsecond basis with no "black swan," or unforeseen, catastrophic event to cause them!

Now, this is America and in America, we honor private contracts between private parties. Its none of the government's goddamn business who is doing what with whom. HOWEVER, when TAXPAYER, that is, PUBLIC money - YOUR MONEY AND MINE - is being used to bailout these private parties BECAUSE THEY TOOK TOO MUCH RISK WITH TOO LITTLE COLLATERAL (itself, fascist and corporatist), then EVERY SINGLE TRANSACTION BETTER GODDAMN WELL BE MONITORED TO ENSURE THE PRIVATE PARTIES CAN PAY AND DO PAY, WITHOUT CAUSING A NATIONAL CRISIS AND DEMANDING OUR MONEY. And instead - INSTEAD - these private parties are allowed to deal in secret, without public knowledge, yet still enjoy public guarantees, public money and public backstops?

And then of course THERE IS THE FEDERAL RESERVE BOARD. This is quite literally every rich man's best friend. This is a private bank. Read that again, dear reader. A PRIVATE BANK. This bank's chariman, Ben "Heliopter" Bernanke, may be appointed by the President (another bank employee) and confirmed by the Senate, but he doesn't REPORT to them. He reports to... well... the nation's PRIVATE BANKS! He's the backstop for the banks. He prints money and gives it to them (at about 0% interest) and buys all the garbage loans they've made to part-time Target workers for 500 grand homes. This man is a bankster's best friend.

So this is The Scam: the private banks lend wildly and recklessly and buy stocks (historically, a VERY risky asset), bonds, foreign government debt, options, mortgage debt in the old days, municipal debt, hell any kind of 'investment' that they think will pay them interest or rise in price. And if the prices crash and they get into real trouble, then just call The Fed. They'll float you the loan to get you out of the mess and buy you time by changing accounting rules, lowering interest rates and even buying the junk that is crashing in value and bankrupting you - they'll buy that junk at full value. Why you just can't lose. Or did you not know how so many "banks" with "executives," "managing partners," and "joint interests" all seem to make millions and billions in salary and bonuses EACH AND EVERY QUARTER without fail?

Its because those "insiders," those "in the know," those "friends of The Fed," aren't worried. They have their own bank. And their bank takes anything in exchange for a few trillion.

You? You have a reformed bankruptcy law and a mailbox full of credit card bills and a child support agency that threatens to throw you in jail - while your "child support" (that is nearly 40% of your income - $1,200/month and up) accrues. That is, when you leave the hospital, prison, or what have you, you will owe BACK "SUPPORT" PLUS INTEREST to a woman who could very well be making six figures a year, be remarried, or both.

Now that I think about it, its a wonder all the men aren't trying to be banksters. Or may be they are.