[excon]

Hello:

I'm blown away by the want to be fiscal conservatives out there who nod their heads and cluck their tongues about how they lament the bailout, but say it's necessary... What??

That kind of thinking, however, plants the entire idea of capitalism on its ear. To wit: The risk reward ratio. In monopoly (as in the real world) one takes a risk in order to get the reward. You GET the reward by being successful. You suffer the consequences when you fail.

That's GOOD. Failure shouldn't be rewarded. Plus, out of the ashes of the failed companies, newer and stronger ones emerge. If we reward failure, then failure is what we get.

Bernanke is an expert on the Great Depression and Chairman of the Federal Reserve. His education won't help him here, because we are experiencing a set of economic circumstances never seen before. Offense is called for, but he's playing defense by trying NOT to make the same errors that were made in the 30s. Yet, he is totally oblivious to the errors he IS making.

He's doing this, of course, NOT to help YOU, but in an attempt to prevent the dufus in chief from going down in history as the worst president ever. Some things, however, can't be stopped.

Bernanke has put the printing press into overtime. The unprecedented creation of infinite dollars for the purpose of flooding the world's entire financial system is causing the birth of an inflation, unknown in a modern times. The only test case we have for the CONSEQUENCES of the this flood of currency is the history of the Weimar Republic, but this time it is on a planetary basis.

In an attempt to avoid what Bernanke sees as consequences of incorrect central bank action in the 1929 - 1933 period, he is creating a new and infinitely more dangerous and longer lasting societal changes! You fret about Fannie and Freddie, and sub prime, but it's the derivatives market that is THE problem.

The world will never be the same again because of the greed of 29 year old hedge fund managers and their corrupt bosses who, along with the regulators, looked the other way.

Buy gold.

excon

[inthebox]

Agree Ex:

The bankers are playing us all. They have the money to influence both Dems and Reps:

Hedge-Fund Ties Help Edwards Campaign - washingtonpost.com


Top earning US Hedge Fund Manager made $3.7bn in 2007 from Subprime Crisis; Top 25 earned average $892m - up from $532m in 2006

Note George soros at #2

Trader Made Billions on Subprime - WSJ.com

Now, in another twist in financial history, Mr. [John ] Paulson is retaining as an adviser a man some blame for helping feed the housing-market bubble by keeping interest rates so low: former Federal Reserve Chairman Alan Greenspan.

[tomder55]

Bubbles come and bubbles burst and panicked lawmakers react too late and create walls designed to prevent the last one from occurring again. No one is willing to rock the boat when times are good. The wall they create after the fact is strictly for CYA.

The Washington Compost got it mostly right :

The meeting of the President's Working Group on Financial Markets on an April day in 1998 brought together Federal Reserve Chairman Alan Greenspan, Treasury Secretary Robert E. Rubin and Securities and Exchange Commission Chairman Arthur Levitt Jr. -- all Wall Street legends, all opponents to varying degrees of tighter regulation of the financial system that had earned them wealth and power.
Their adversary, although also a member of the Working Group, did not belong to their club. Brooksley E. Born, the 57-year-old head of the Commodity Futures Trading Commission, had earned a reputation as a steely, formidable litigator at a high-powered Washington law firm. She had grown used to being the only woman in a room full of men. She didn't like to be pushed around.

Now, in the Treasury Department's stately, wood-paneled conference room, she was being pushed hard.

Greenspan, Rubin and Levitt had reacted with alarm at Born's persistent interest in a fast-growing corner of the financial markets known as derivatives, so called because they derive their value from something else, such as bonds or currency rates. Setting the jargon aside, derivatives are both a cushion and a gamble -- deals that investment companies and banks arrange to manage the risk of their holdings, while trying to turn a profit at the same time.

Unlike the commodity futures regulated by Born's agency, many newer derivatives weren't traded on an exchange, constituting what some traders call the "dark markets." There were now millions of such private contracts, involving many of Wall Street's top firms. But there was no clearinghouse holding collateral to settle a deal gone bad, no transparent records of who was trading what.

Born wanted to shine a light into the dark. She had offered no specific oversight plan, but after months of making noise about the dangers that this enormous market posed to the financial system, she now wanted to open a formal discussion about whether to regulate them -- and if so, how.
Greenspan, Rubin and Levitt were determined to derail her effort. Privately, Rubin had expressed concern about derivatives' unruly growth. But he agreed with Greenspan and Levitt that these newer contracts, often called "swaps," weren't exactly futures. Born's agency did not have legal authority to regulate swaps, the three men believed, and her call for a discussion had real-world consequences: It would cast doubt over the legality of trillions of dollars in existing contracts and create uncertainty over how to operate in the market.

At the April meeting, the trio's message was clear: Back off, Born.

"You're not going to do anything, right?" Rubin asked her after they had laid out their concerns, according to one participant.

Born made no commitment. Some in the room, including Rubin and Greenspan, came away with a sense that she had agreed to cool it, at least until lawyers could confer on the legal issues. But according to her staff, she was neither deterred nor chastened.

"Once she took a position, she would defend that position and go down fighting. That's what happened here," said Geoffrey Aronow, a senior CFTC staff member at the time. "When someone pushed her, she was inclined to stand there and push back."

Greenspan and Rubin maintained then, as now, that Born was on the wrong track. Greenspan, who left the Fed job in 2006 after an unprecedented three terms, also insists that regulating derivatives would not have averted the present crisis. Yesterday on Capitol Hill, a Senate committee opened hearings specifically on the role of financial derivatives in exacerbating the current crisis. Another hearing on the issue takes place in the House today.

The economic brain trust not only won the argument, it cut off the larger debate.

Do you think that will change with a President Obama ? Lol
He proved that he was just another typical politician many times over .

In the summer of 2005, a bill emerged from the Senate Banking Committee that considerably tightened regulations on Fannie and Freddie, including controls over their capital and their ability to hold portfolios of mortgages or mortgage-backed securities. All the Republicans voted for the bill in committee; all the Democrats voted against it. To get the bill to a vote in the Senate, a few Democratic votes were necessary to limit debate. This was a time for the leadership Sen. Obama says he can offer, but neither he nor any other Democrat stepped forward.
Instead, by his own account, Mr. Obama wrote a letter to the Treasury Secretary, allegedly putting himself on record that subprime loans were dangerous and had to be dealt with. This is revealing; if true, it indicates Sen. Obama knew there was a problem with subprime lending -- but was unwilling to confront his own party by pressing for legislation to control it. As a demonstration of character and leadership capacity, it bears a strong resemblance to something else in Sen. Obama's past: voting present.

Obama Voted 'Present' on Mortgage Reform - WSJ.com

Guess who introduced that regulatory bill ? You got it ;John McCain. And who blocked it ? The Democrats in the Senate... the very party that claims to want to have tight regulations.

I hear you saying already that the Republicans were in charge yada yada. The fact is that the Republicans never have had enough of a majority in the Senate to assure their policies and bills would not get stalled before it reached the President's desk.

It is a canard to say that if someone is in favor of deregulation that they favor NO REGULATION.This crisis is not about the free market.This crisis is about when politicians, and their financial cronies are allowed to play games with government guarantees and regulations.

[excon]

Hello again, in:

Doom and gloom. But, unlike the dufus, I don't want to scare you. I want you to get PREPARED! Here, in my view, are upcoming events:

1. US exchanges will be closed. There is a chance all world exchanges will close down.

2. Only gold and currencies which are planetary markets will continue to trade.

3. Retirement programs will not pay off.

4. Medicare and Medicaid will at best buy you a bandage or pay for 1/4 of a visit to a free clinic.

5. Social security, due to the massive upcoming inflation, will provide no security for any society.

6. Money Market Funds will not pay off.

7. A CD is a gift, but not to you - for the government.

8. Central bank action will revert to a strategy of everyone for themselves.

9. 401k's NOT self directed are headed for the toilet forever.

10. Exchange Traded Funds will not return the assets upon which it is based to you.

11. Credit card companies are going to have to be bailed out.

12. GE Capital is a huge OTC derivative dealer. It'll need a bailout.

13. Gold is the only Honest Money because it has no liability attached to it. Gold coins are the best way to own gold for the average investor.

excon

[ETWolverine]

I agree. We don't need the bailout package.

When the deal was still being discussed, I argued that it was a bad idea, and that the long-term effects, in terms of socialism and in terms of necessary consequences to people who made bad decisions, was much greater than the short term gains. I argued that instead of buying up bad assets, the Fed should make loans to help capitalize banks and allow them to make loans to each other that they are currently afraid to make due to fears that the borrowing banks will collapse. The banks need capital, not a purchase of their crap assets, and the Fed is in a strong position to make such capital available in short-term loans.

So what has happened so far?

So far the bailout bill, which we needed YESTERDAY or the entire world economy was going to collapse, still isn't in effect. The markets clearly don't like the bill because of the obvious socialistic bent of the package. That is why the markets have been dropping like lodestones. The people don't like it either because it rewards (or at least ignores) the very people who caused the problem. And the Fed and Paulson have both put forward the idea of making loans to help capitalize banks.

In other words, exactly what I predicted was going to happen is happening.

We don't need the bailout package. We never needed it. The package was a knee-jerk reaction (perhaps we should leave off the word "knee") without any forethought of the consequences.

And yes, it frustrates the heck out of me. Even my parents, who are die hard conservatives, believe we need this bailout package, and I can't convince them otherwise. It's frustrating.

Elliot

[ETWolverine]

On the other hand, I don't agree with your predictions, excon.

I believe that eventually the bailout package will prop up the banks and investment companies enough so that there will be no loss of principal to individuals. That much good the bailout will do. The costs of doing so are to high, in my opinion, but it will certainly accomplish that much.

Either that, or someone will get smart and lend money to help capitalize banks instead of buying their bad assets. In which case, the problem will sort itself out on its own over time. Banks and investment companies will hold the assets and collect in full on the vast majority of them. The ones that fail, they will foreclose on and eventually get some of their money back. They will write off the losses on the rest and have a few bad years of poor earnings or losses. Those losses will be reserved against via the capital loans from the Fed. And life will go on.

Either way, the wholesale collapse of the economy is not in the cards.

Elliot

[excon]

On the other hand, I don't agree with your predictions, excon.

Hello again, El:

I, too, don't doubt the bailout will have the short term effect that the dufus and his gang wants.

However, I'm looking down the road about 18 months when all those trillions of fiat dollars send prices and wages through the roof. What?? As a banker, you think all these dollars will just disappear? Dude!

I don't think you understand the root cause of inflation.

excon

[magprob]

Now we must pay the piper. The entire middle class of America may be able to do it. It will be close.
After all, we owe the private corporation that controls our currency trillions of dollars. Many of you have said in the past that we need the federal reserve to regulate it. Well, they regulating and you are paying them.
Hope you get used to your new found poverty quick enough. You will be amazed at just how little you can get by on.

[tomder55]

As Goldman Sachs alumni play a key role in stewarding the nation's economy, it's worth recalling that the late economist John Kenneth Galbraith blamed Goldman Sachs for helping to cause the Great Depression. In his book, The Great Crash, 1929, Galbraith, a key figure in President John F. Kennedy's administration, devoted an entire chapter he titled “In Goldman, Sachs, We Trust,” to detailing the “large-scale corporate thimblerigging” that Goldman and other Wall Street firms practiced in the 1920s.
Thimbleriggers or not, supremely self-assured Goldman Sachs alumni at the highest levels of the Bush administration are now pulling the levers of power in the nation's capital, confident that they know the way out of the current market turbulence.
Their power is likely to grow no matter who's in charge in Washington. Commentator David Brooks may not have been joking when he observed this summer: “over the past few years, people from Goldman Sachs have assumed control over large parts of the federal government. Over the next few, they might just take over the whole darn thing.”

Read the rest :
The American Spectator: Goldman Sachs Government

[magprob]

The very same people that caused the crash of 29, are behind this one. Another generation with the same goal. Control all of the marbles.
You can actually research that and see which companies were pulling the strings then and now. Only the names have changed... just a little.
They would love for us to think that it is simply a conspiracy theory!

[magprob]

That pretty well sums it up tom. Like I have come to believe, it doesn't really matter who you vote for. They are too well entrenched at this point.

"Their power is likely to grow no matter who's in charge in Washington. Commentator David Brooks may not have been joking when he observed this summer: “over the past few years, people from Goldman Sachs have assumed control over large parts of the federal government. Over the next few, they might just take over the whole darn thing.”

From
The American Spectator: Goldman Sachs Government

[magprob]

Oh, and BTW,
Here's a look into who was involved in setting up the Federal Reserve in 1913.

Rothschild Banks of London and Berlin (Rothschild and world economy)
Lazard Brothers Bank of Paris
Israel Moses Sieff Banks of Italy
Warburg Bank of Hamburg, Germany and Amsterdam
Kuhn Loeb Bank of New York
Lehman Brothers Bank of New York
Goldman Sachs Bank of New York
Chase Manhattan Bank of New York (Controlled By the Rockefeller Family Tree)