Are those at the head of our monetary institutions a bunch of idiots or do they have a plan? Considering the state of global finance, which is pretty well documented on moneyfiles.org, it is indeed a difficult to make sense of the credit market shutdown. Here is a NYTimes excerpt, also published as of 9/04/09:
... Banks to test debt market this week: All summer,
bankers have sweated on Wall Street. Instead of spending time at
the golf course or at their summer houses, many found themselves
in the office trying to make sense of the credit market shutdown
that had left their companies responsible for the billions of
dollars used to finance leveraged buyouts, yet facing uncertain
prospects of getting investors to take some of the debt off their hands...
Flash back. In his 9/05/07 article, Stephen King, a HSBC banker and regular columnist at the independent.uk, mentions several ugly truths when admitting that in order to save the innocent, we may need to bail out the guilty. Rewards for failures is a typical elite thing. It is how the powers-that-be and their cheerleaders have always colluded. However, this sums it up pretty well. The bailout logic is borrowed from a collectivist concept that the government is the ultimate wealth creator. Though there is something faulty in this particular case: why can't the government just make sure that its citizens are provided with the adequate financial education instead, so the guilty can be prosecuted rightfully? This major failure raises another issue: should the state be in charge of the education? On Blomberg.com, the columnist Mark Gilbert takes a radical stance by arguing in favor of easing the money-market crisis by letting banks go bust. Bailouts merely postpone the outcomes while making it worse. 'Helicopter Ben' and his clique have thus chosen to completely implode the world economy. This is a super-duper bad-loan bailout scam, Bill Fleckenstein concludes. The truth is that Citigroup Inc. and JPMorgan Chase & Co., are just 'Enrons' waiting for their day of reckoning. And the game goes on and on. As the monetary scientists improve their old tricks to save 'them' from disgrace by raising more than $60 billion, some already wonder if the 'Banks’ Stabilization Fund' will work:
... “It is quickly being realized that it doesn’t really
solve the problems,” Joshua Rosner, a managing director at the
research firm Graham Fisher & Company who had been skeptical of
the proposal, told The Times. “The path they have taken of skimming
off the cream from the top doesn’t resolve the fact there is poison
at the bottom....”
Doomed profits:
What has happened over the last decades is that the world financial institutions have learned better to shift risks - they think. The result of this shortsighted assumption is that our security systems have remained dormant, allowing the 'easy money binge' to perpetuate the illusion of wealth.
Even Chinese investors are betting all they have on a dead cat bounce. They are so infatuated with their shares that they don't hear their own lawmakers sounding the alarm:
..."Although listed companies achieved rapid growth,
investors should still beware of hidden bubbles behind the
profit surge and invest in a prudent and rational manner,"
said the report released on Sunday. According to the report,
the interim profit figures relied too much on yield of investment
in the securities market and the prospects of a continued profit
increase is doubtful...
This insane credit expansion fuelled by unethical speculation will cost China dearly. Damages are already showing: rivers are so polluted that they are described as on the verge of collapse. In turn heavy pollution is blamed for soaring birth defects and disease englufs the country. This only on a human level. The economic fallout will be unprecedented.
All is a matter of psychology and perception whatsoever. And this will not prevent the world economy from falling off a cliff. Hard data always wins over in due time. One does not wipe off 1,000 trillion in world liabilities just like that, even if this is electronic or virtual money. Strangely, it is very rare to see 'super bulls' and 'perma-bears' converge: The bulls by calling for bailouts and the bear by nodding pessimistically. The profits of doom will be soon causing the next shocks to the broad market.
Those who are forecasting Armageddon in the hope that
the Fed will come to the rescue are, for the most part, stock-
market bulls. But, strangely, their views are shared by their
opposites, the so-called perma-bears. Perma-bears have long
argued that the American economy in general (and the housing
market in particular) represents an unsustainable bubble, inflated
by cheap credit and a dramatic mispricing of risk. Convinced
that the downturn they have forecast is finally here, they write
off as fantasy any signs that the rest of the economy might
weather the housing and financial-market storms.
Both groups now envision the perfect storm coming our way.
Now comes the nasty 1,000 dollar trillion question: what will credit agencies say after the demise, when an increasing scrutiny will point to them as the culprits responsible for coercive and perilous speculation?
Lethal Collusion Exposed:
In the FTimes last month again, one could read that credit rating agencies were being investigated for their symbiotic relationship with investment banks in the EU. Axel Weber, President of the Bundesbank, said: “What we are seeing is basically what we see underlying all banking crises.” In America the response has been less sharp but critical nonetheless, the same FTimes columnist reports. Of course the agencies deny any wrongdoing. This shouldn't come as a surprise. They have always done so. It became just more blatant during the subprime debacle. Now that the damages are done, the S.E.C is probing ratings agencies' subprime role. According to CBS, last September, the federal agency hasn't come to any conclusions about their explanations for unexpected losses on those assets. Remember Enron? How many people are currently jailed? And they will be asked again many questions when the consumer credit bubble pops. How does it come that they turned a blind eye to $1,000 trillion black hole, do you think?
Ellen Brown has probed a 300 year-old scheme maintained in place (despite the boom-bust cycles) with the complicity of the common man who views the government and central bankers as wealth managers. The cliques at the top, which have enjoyed the ignorance of the masses for centuries long, are now faced with a boomerang effect. For them too, chickens have come back home to roost.
Do you believe me now when I speak of 'financial detox' whose consequences may be as severe as the great depression? We didn't get there because of a lack of regulations but through products sold as exotic financial instruments (credit derivatives, commercial paper, hedge funds, CDOs, CDSs, SIVs, ABCP, etc), hence any astute way to recycle debts found its way through. I don't know how most of these instruments work, but in the Asia Times, James Cumes, describes this financial addiction quite well:
When everyone in the house is crazy, only the sane seem
like fools. So it was when the financial addiction spread everywhere.
Then everyone who was not taking his daily dose of heroin or cocaine
became the fringe-dweller, the oddball, the brake on progress, the
party-pooper at the greatest no-cash-down, how-to-spend-it shindig
that our planet has ever known. Debt piled on debt everywhere: in
households, corporations, public finances and international deficits,
in magnitudes that had never been even glimpsed in the most creative
imaginations before.
... Banks to test debt market this week: All summer,
bankers have sweated on Wall Street. Instead of spending time at
the golf course or at their summer houses, many found themselves
in the office trying to make sense of the credit market shutdown
that had left their companies responsible for the billions of
dollars used to finance leveraged buyouts, yet facing uncertain
prospects of getting investors to take some of the debt off their hands...
Flash back. In his 9/05/07 article, Stephen King, a HSBC banker and regular columnist at the independent.uk, mentions several ugly truths when admitting that in order to save the innocent, we may need to bail out the guilty. Rewards for failures is a typical elite thing. It is how the powers-that-be and their cheerleaders have always colluded. However, this sums it up pretty well. The bailout logic is borrowed from a collectivist concept that the government is the ultimate wealth creator. Though there is something faulty in this particular case: why can't the government just make sure that its citizens are provided with the adequate financial education instead, so the guilty can be prosecuted rightfully? This major failure raises another issue: should the state be in charge of the education? On Blomberg.com, the columnist Mark Gilbert takes a radical stance by arguing in favor of easing the money-market crisis by letting banks go bust. Bailouts merely postpone the outcomes while making it worse. 'Helicopter Ben' and his clique have thus chosen to completely implode the world economy. This is a super-duper bad-loan bailout scam, Bill Fleckenstein concludes. The truth is that Citigroup Inc. and JPMorgan Chase & Co., are just 'Enrons' waiting for their day of reckoning. And the game goes on and on. As the monetary scientists improve their old tricks to save 'them' from disgrace by raising more than $60 billion, some already wonder if the 'Banks’ Stabilization Fund' will work:
... “It is quickly being realized that it doesn’t really
solve the problems,” Joshua Rosner, a managing director at the
research firm Graham Fisher & Company who had been skeptical of
the proposal, told The Times. “The path they have taken of skimming
off the cream from the top doesn’t resolve the fact there is poison
at the bottom....”
What has happened over the last decades is that the world financial institutions have learned better to shift risks - they think. The result of this shortsighted assumption is that our security systems have remained dormant, allowing the 'easy money binge' to perpetuate the illusion of wealth.
Even Chinese investors are betting all they have on a dead cat bounce. They are so infatuated with their shares that they don't hear their own lawmakers sounding the alarm:
..."Although listed companies achieved rapid growth,
investors should still beware of hidden bubbles behind the
profit surge and invest in a prudent and rational manner,"
said the report released on Sunday. According to the report,
the interim profit figures relied too much on yield of investment
in the securities market and the prospects of a continued profit
increase is doubtful...
This insane credit expansion fuelled by unethical speculation will cost China dearly. Damages are already showing: rivers are so polluted that they are described as on the verge of collapse. In turn heavy pollution is blamed for soaring birth defects and disease englufs the country. This only on a human level. The economic fallout will be unprecedented.
All is a matter of psychology and perception whatsoever. And this will not prevent the world economy from falling off a cliff. Hard data always wins over in due time. One does not wipe off 1,000 trillion in world liabilities just like that, even if this is electronic or virtual money. Strangely, it is very rare to see 'super bulls' and 'perma-bears' converge: The bulls by calling for bailouts and the bear by nodding pessimistically. The profits of doom will be soon causing the next shocks to the broad market.
Those who are forecasting Armageddon in the hope that
the Fed will come to the rescue are, for the most part, stock-
market bulls. But, strangely, their views are shared by their
opposites, the so-called perma-bears. Perma-bears have long
argued that the American economy in general (and the housing
market in particular) represents an unsustainable bubble, inflated
by cheap credit and a dramatic mispricing of risk. Convinced
that the downturn they have forecast is finally here, they write
off as fantasy any signs that the rest of the economy might
weather the housing and financial-market storms.
Both groups now envision the perfect storm coming our way.
Now comes the nasty 1,000 dollar trillion question: what will credit agencies say after the demise, when an increasing scrutiny will point to them as the culprits responsible for coercive and perilous speculation?
Lethal Collusion Exposed:
In the FTimes last month again, one could read that credit rating agencies were being investigated for their symbiotic relationship with investment banks in the EU. Axel Weber, President of the Bundesbank, said: “What we are seeing is basically what we see underlying all banking crises.” In America the response has been less sharp but critical nonetheless, the same FTimes columnist reports. Of course the agencies deny any wrongdoing. This shouldn't come as a surprise. They have always done so. It became just more blatant during the subprime debacle. Now that the damages are done, the S.E.C is probing ratings agencies' subprime role. According to CBS, last September, the federal agency hasn't come to any conclusions about their explanations for unexpected losses on those assets. Remember Enron? How many people are currently jailed? And they will be asked again many questions when the consumer credit bubble pops. How does it come that they turned a blind eye to $1,000 trillion black hole, do you think?
Ellen Brown has probed a 300 year-old scheme maintained in place (despite the boom-bust cycles) with the complicity of the common man who views the government and central bankers as wealth managers. The cliques at the top, which have enjoyed the ignorance of the masses for centuries long, are now faced with a boomerang effect. For them too, chickens have come back home to roost.
Do you believe me now when I speak of 'financial detox' whose consequences may be as severe as the great depression? We didn't get there because of a lack of regulations but through products sold as exotic financial instruments (credit derivatives, commercial paper, hedge funds, CDOs, CDSs, SIVs, ABCP, etc), hence any astute way to recycle debts found its way through. I don't know how most of these instruments work, but in the Asia Times, James Cumes, describes this financial addiction quite well:
When everyone in the house is crazy, only the sane seem
like fools. So it was when the financial addiction spread everywhere.
Then everyone who was not taking his daily dose of heroin or cocaine
became the fringe-dweller, the oddball, the brake on progress, the
party-pooper at the greatest no-cash-down, how-to-spend-it shindig
that our planet has ever known. Debt piled on debt everywhere: in
households, corporations, public finances and international deficits,
in magnitudes that had never been even glimpsed in the most creative
imaginations before.
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