At one level, this was all done on purpose. There are solutions. None of them are being implemented. This bailout that was all so urgent won't move much into the economy for a year or so. It wasn't a bailout, it was a non-debated funding bill.
If you read it for it's omissions, we're totally fucked
Here's an alternative to what GOV is doing;
Bernanke and the FED have admitted that they are completely in the dark.
Paul Craig Roberts has some good ideas. He is a former assistant treasury sec.
" Ladders of upward mobility are being dismantled by offshoring"
" The purchaser of a swap is not required to own the asset in order to contract for a guarantee of its value. Therefore, as many people could purchase as many swaps as they wished on the same asset. Thus, the total value of the swaps greatly exceeds the value of the assets.*"
Unlimited gambling as a result of zero regulation.
"The next step is for holders of the swaps to short the asset in order to drive down its value and collect the guarantee."
Just like shooting fish in a barrel.
" The federal government should declare all swap agreements to be fraudulent contracts, except for a single swap held by the owner of the asset."
" Simply wiping out these fraudulent contracts would remove the bulk of the vast overhang of "troubled" assets that threaten financial markets."
Just imagine where we would be if 90--95 % of all the derivatives just disappeared.
Commenting on the sub-prime bailout;
" The government did not need to spend one dime. All government needed to do was to suspend the mark-to-market rule. This simple act would have removed the solvency threat to financial institutions by allowing them to keep the derivatives at book value until financial institutions could ascertain their true values and write them down over time"
"Two more simple acts would have completed the rescue without costing the taxpayers one dollar: an announcement from the Federal Reserve that it will be lender of last resort to all depository institutions including money market funds, and an announcement reinstating the uptick rule."
The uptick rule was suspended or repealed a couple of years ago in order to permit hedge funds and shyster speculators to rip-off American equity owners. The rule prevented short-selling any stock that did not move up in price during the previous day."
"In other words, speculators could not make money at others' expense by ganging up on a stock and short-selling it day after day"
This was another turkey shoot. The hedge funds had enough money that they could always drive down a stock.
The Plunge Protection Team spends billions of our money trying to uphold the price of stocks. At the same time, GOV allows speculators to drive down prices to make profits.
"As a former Treasury official, I am amazed that the US government, in the midst of the worst financial crises ever, is content for short-selling to drive down the asset prices that the government is trying to support."
"The bald fact is that the combination of ignorance, negligence, and ideology that permitted the crisis to happen still prevails and is blocking any remedy."
Obama can announce all the bailouts that he wants. He would be far more productive if he would just change a few rules.
"Either the people in power in Washington and the financial community are total dimwits or they are manipulating an opportunity to redistribute wealth from taxpayers, equity owners and pension funds to the financial sector."
This wouldn't come as a complete surprise.
"These staggering costs are pointless and are to no avail, as not one step has been taken that would alleviate the crisis."
This pretty much sums up the chances for the success of Obama's plan.
"If we add to my simple menu of remedies a ban, punishable by instant death, for short selling any national currency, the world can be rescued from the current crisis without years of suffering, violent upheavals and, perhaps, wars."
" Obama's cabinet and National Economic Council are filled with representatives of the interest groups that caused the problem."
Well, what a huge surprise. He received hundreds of millions in campaign contributions. One might almost suspect that it came from the banks. They're the ones with the hundreds of millions.
"Consumers are now so indebted that they cannot increase their spending by taking on more debt. Thus, whether or not the banks resume lending is beside the point."
GOV is currently trying to get people to borrow. Obama is a tool of the banks. GOV is transferring $ trillions from the taxpayers and their children and grandchildren to the banks.
If people continue to borrow, the banks have new income and all the trillions that were given to them.
Since all our jobs were offshored, we don't have the income to pay our loans. The banks will survive nicely on money taken from the taxpayer. The taxpayer will default and the banks will use the taxpayer's money to seize his property.
The children of the taxpayer will toil for the next 30 years to buy back the property lost by their parents due to the fact that the banks were siting on all the money.
Ahhh, the British Banking System at it's best. If this sounds familiar, maybe you're Irish. At one time, the British owned every square inch of Ireland. The Irish couldn't walk on the land or fish in the stream.
Just imagine what would happen if everyone defaulted on their loan. There isn't any way that the derivatives could be satisfied. The system would have to implode. The implosion would be ugly but, it might be an improvement on debt slavery for your children and grandchildren.
http://www.rense.com/general85/how.htm
Dan
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
