Pensacola Fishing Forum / General Discussion / Off Topic / Stop a financial catastrophe. Time is running out. / Latest Posts

RE: Stop a financial catastrophe. Time is running out.

Genesis — Tue, 05 Aug 2008 09:51:36 GMT

BTW, want to know who was bailed out by the housing bill?

Read this:

http://market-ticker.denninger.net/archives/531-FLASH-Now-We-Know-There-WAS-A-Threat.html

Remember when I said that I believed that Asian Central Banks had threatened Paulson regarding Freddie and Fannie?

Here 'ya go from Bloomberg this evening:

"Concerns about the financial health of the biggest U.S. mortgage finance company had driven Fannie Mae's borrowing costs to the highest since March the previous week and its shares had tumbled 45 percent on the New York Stock Exchange. Investors in Asia, the biggest foreign owners of Fannie Mae's $3 trillion of bonds, were asking the Treasury to bolster the government- sponsored company and its smaller competitor, Freddie Mac, said three people with knowledge of the talks.
Paulson told Mudd he had a plan to restore confidence in Fannie and Freddie, the core of the Bush administration's efforts to revive the U.S. housing market. ``At that point, the proposal began to take form,'' Mudd, 49, said in an interview. ``We're trying to solve a crisis of confidence. Would this do it?''
The next afternoon, before financial markets opened Monday in Asia, Paulson announced the rescue plan, saying he would seek authority to buy unlimited equity stakes in the companies and their bonds if needed, while the Federal Reserve would lend directly to Fannie and Freddie. Congress included the proposals in a broader housing bill that President George W. Bush signed into law last week.
Asian investors were among the most important groups to soothe because central banks, financial institutions and funds in the region own $800 billion of Fannie Mae and Freddie Mac's $5.2 trillion in debt, according to data compiled by the Treasury. U.S. officials were concerned that sales from the region would push lending rates higher, said the people, who declined to be named because the discussions were confidential. "

$800 billion dollars. The precise amount that Paulson asked for, and got, in debt ceiling addition so he could buy $800 billion, potentially, worth of Fannie and Freddie's debt.

And there, in the underlined portion of the quote, is your threat. Either backstop that which the black letter printing in the prospectus (and yes, it really is there) says has no backstop and can lose value or we will not only refuse to buy more but will sell what we have.

Don't you think the American People deserved to know BEFORE our government signed over $800 billion of taxpayer money to CHINA that FOREIGN INVESTORS AND CENTRAL BANKS - THAT IS, FOREIGN GOVERNMENTS - had effectively BLACKMAILED our government?

Are you prepared to sit on your ass while FOREIGN GOVERNMENTS dictate what our government does, to the tune of $800 billion United States Dollars we do not have, constituting a personal debt of about $2,200 per person in The United States?

That's right folks - every man, woman and child had extorted from them $2,200 (or nearly $10,000 per family of four!) plus interest (forever, since we will never pay this debt down) and you weren't even told that it happened.

Had this article not been published by Bloomberg you still wouldn't know because Paulson, Bush and Congress DID NOT TELL YOU.

Now granted, the $800 billion (presumably) hasn't yet been spent. But if and when it is, you won't be told about that either, because Congress has no oversight authority nor right to approve Paulson's actions in this regard, so long as he remains within the $800 billion limit!

They claimed this was about helping homeowners.

THEY LIED; this was and is about bailing out FOREIGN GOVERNMENTS who made bad bets at YOUR expense.

Angry yet?

Angry enough to DEMAND that this bill be rescinded, and take every (lawful) action available to you as a United States citizen until it is?

If not now, then when will you insist our government NOT respond to blackmail by foreign interests - especially when they do so without telling you first?

No? You don't think you need to act on this right now, today?

Then take your accumulated wealth and earnings capacity - all of it - and kiss it goodbye. Your government is no longer standing in protection of our own economic sovereignty.

By the way, having gotten away with it once, they will do so again. $10,000 per family is, in fact, quite cheap compared to what's coming.

Go read The Ticker below this one and contemplate what happens in the Capital Markets when they "wake up" to how this bill got done.

You heard it here first.

RE: Stop a financial catastrophe. Time is running out.

Nat — Sat, 02 Aug 2008 16:31:56 GMT

You really should get something for that yeast infection:doh

RE: Stop a financial catastrophe. Time is running out.

Genesis — Sat, 02 Aug 2008 08:33:39 GMT

:looser

Amusing that you're still running this crap.

Never mind that The Fed created essentially zero of the credit that caused this boom/bust cycle. That was all done via fraud in the [b]private sector[/b], not by "the e-vile Fed Machine."

The acts since August have been stupid and backwards, and Bear Stearns, in particular, was downright unconstitutional.

But - the "lend to anyone who can fog a mirror" didn't come from The Fed. IndyMac, Countrywide, Fannie/Freddie, etc - none were "The Fed".

As for your "cited article", the preconceived notion is then tortured to fit reality. Treasury issues the bonds, thereby being the initiator. And who is Treasury? Its us. We elect the boobs to office who then do things like increase the debt ceiling by $800 billion and hand that blank check to Treasury.

The Fed? Bah. Congress dude - you know, the proper (and lawful, under the Constitution) source of such monetary decisions?

Yep.

Now you'll have to excuse me as I'm spending my time the last few weeks actually working on fixing this, including a personal trip to DC.

You, on the other hand, are spewing crap on Internet message boards.

RE: Stop a financial catastrophe. Time is running out.

Nat — Sat, 02 Aug 2008 08:08:26 GMT

This essay explains the much bigger picture, far beyond Fannie and Freddie

http://financialsense.com/fsu/editorials/deepcaster/2008/0801.html

Opportunities & Threats from
the "Paper Money" Regime

by DeepCaster LLC, deepcaster.com | August 1, 2008

The banks have begun falling…first Bear Stearns, then IndyMac, and Heritage…The Climacteric we forecast has begun.

The Threat of Systemic Collapse about which Deepcaster (and, increasingly, others) has written is also increasing.

But in this Threat there are several Opportunities. The August Opportunity is the first significant one, which we note below.

To fully appreciate The Threat and identify The Opportunities, it is essential first to briefly review how we came to be in this precarious position.

The Root Cause of The Systemic Threat

The root cause of The Threat lies in the structure, functioning and policies of the private-for-profit “U.S.” Federal Reserve.

Various international private banks, several of which are headquartered in Europe, own the “United States” Federal Reserve Bank.

These International Bankers, acting through their “U.S.” Fed, make money by creating money out of “thin air” as eloquently described by the Dean of the Newsletter Writers, Richard Russell:

“I still can’t get over the whole Federal Reserve racket.”

Consider the following - - let’s take a situation where the U.S. government needs money. The U.S. doesn’t just issue United States Notes, which, of course it could. These notes would be dollars backed by the full faith and credit of the United States. No, the U.S. doesn’t issue dollars straight out of the U.S. Treasury.

This is what the U.S. does - - it issues Treasury Bonds. The U.S. then sells these bonds to the Fed. The Fed buys the bonds. Wait, how does the Fed pay for the bonds? The Fed simply creates money “out of thin air” (book-keeping entry) with which it buys the bonds. The money that the Fed creates from nowhere then goes to the U.S. The Fed holds the U.S. bonds, and the unbelievable irony is that the U.S. then pays interest on the very bonds that the U.S. itself issued. (With great profit to the private owners of The Fed - - Ed. Note) The mind boggles.

The damnable result is that the Fed effectively controls the U.S. money supply. The Fed is …not even a branch of the U.S. government. The Fed is not mentioned in the Constitution of the United States. No Constitutional amendment was ever created or voted on to accept the Fed. The Constitutionality of the Federal Reserve has never come before the Supreme Court. The Fed is a private bank that keeps the U.S. forever in debt - - or I should say in increasing debt along with ever rising interest payments.

How did the Fed get away with this outrage? A tiny secretive group of bankers sneaked through a bill in 1913 at a time when many in Congress were absent. Those who were there and voted for the bill didn’t realize (as so often happens) what they were voting for (shades of the shameful 2002 vote to hand over to President Bush the power to decide on war with Iraq).”

Richard Russell, “Richards Remarks,” dowtheoryletters.com, March 27 2007

After President Wilson signed the Federal Reserve Act into law in 1913, he reportedly said, “I am a most unhappy man, I have unwittingly ruined my country…a great industrial nation is now controlled by its system of credit…the growth of the nation, therefore, and all of our activities are in the hands of a few men…”

Insightful economic forecaster Ian Gordon notes several negative consequences of the nearly 100-year reign of The Fed, consequences with which we cope today.

“Since its inception in 1913, the Federal Reserve Board has been responsible for almost 95% devaluation of the U.S. Dollar. All this has been achieved through its ability to continually inflate the money supply.

click the link to continue

RE: Stop a financial catastrophe. Time is running out.

Nat — Thu, 31 Jul 2008 18:57:21 GMT

The cost of socialism

http://financialsense.com/fsu/editorials/schiff/2008/0731.html

RE: Stop a financial catastrophe. Time is running out.

blue gheenoe — Tue, 29 Jul 2008 15:34:10 GMT

Good documentary on the increasing power of Big Government in America. Specifically questions the legality for the creation of the Federal Reserve and the personal income tax.

"America: Freedom to Fascism", by Aaron Russo

[url]http://www.netflix.com/Search?ff2_submit.x=13&ff2_submit.y=14&v1=from+freedom+to+fascism[/url]

RE: Stop a financial catastrophe. Time is running out.

Genesis — Sun, 27 Jul 2008 10:37:38 GMT

Sigh.

Ok, truth time.

Here is the chart of GLD (Gold ETF, 1/10th the price of gold continuous contract with very little slippage, actually buys the physical metal behind the contract):

And here is the chart of the SPX, the S&P 500:

We will take the opening prices on January 2nd, and the closing prices of Friday, and analyze two strategies - buy and hold Gold, and short and hold the SPX, both with zero leverage (that is, simply purchasing or shorting the underlying instrument.)

On January 2nd, GLD opened at $83.56 and closed Friday at $91.69.

Buying gold on the first of the year has returned (thus far) 9.7%. Not bad.

On January 2nd, the SPX opened at 1467. Friday, it closed at 1257.

Shorting the SPX has returned 16.7% thus far, or close to double the return obtained by buying Gold.

Both strategies have produced a positive return in an overall down market, therefore, both are "winners" compared to the traditional "buy and hold the market index" strategy.

However, on a measure of return, shorting the SPX has been the standout winner compared to buying metals, without question.

I think the folks talking about buying Gold MINERS need to have their head examined. AUY, Yamana Gold, began the year at $13.21. It closed Friday at $12.76, for a net LOSS thus far this year. The GDX, or the miners ETF, began the year at $49.35. It closed Friday at $44.26, or a ten percent LOSS!

People seem to forget that mining is a very petroleum intensive business. It consumes copious amounts of energy and not just in the obvious places; the large tires used on the heavy equipment, for example, are all made out of OIL.

Junior miners are very highly geared, in that they are essentially all bets "on the come" for future appreciation and "believed to be recoverable but not yet economically proven" deposits. Small shifts in the cost of production are often the difference between a stock that shoots the moon and one that is an outright zero.

Unless you believe that energy prices are about to collapse mining stocks are insanely speculative, and juniors even more so. If you're going to point at juniors as an "investment" and try to make an argument for them then someone trading other parts of the market should be using futures or even options as their comparison against your total return over the next 12 months.

If you believe we are about to collapse into hyperinflation you must first explain why the bankers, of which The Fed is a part, would permit such a thing to happen. Why, for example, would they loan you $300,000 to buy a house and then be willing to accept repayment of that $300,000 in dollars that, in aggregate, wouldn't even purchase a small car?

The "Argentina" crowd, and there are a lot of them, ignore the fact that Argentina and other nations that have undergone this sort of collapse had their national debt denominated in something other than their native currency, and thus the bankers were not destroyed by the event, nor did the bankers have any effective means of stopping the government from doing it. Neither is true in The United States, and until you can explain why a banker would be willing to allow you to borrow a large sum of money that will buy a house and then pay them back with a large sum of money that is now only worth enough to buy a few loaves of bread (if that), you've got a problem with your thesis.

RE: Stop a financial catastrophe. Time is running out.

Nat — Sun, 27 Jul 2008 05:49:12 GMT

Reading the tsunami series may be of interest to some, Part 3 Greenspan's grand design

shed's some light on how the traditional banking system was hijacked.

http://www.financialsense.com/editorials/engdahl/main.html

RE: Stop a financial catastrophe. Time is running out.

Nat — Sun, 27 Jul 2008 05:25:21 GMT

Are you predicting it's not going any higher?

Sinclair hasn't changed his prediction other than to say if anything he has underestimated

Before Jan 11 2011 $1600 per oz

and high quality producers at multiples of thier current prices

RE: Stop a financial catastrophe. Time is running out.

Genesis — Sat, 26 Jul 2008 19:31:30 GMT

Actually, the folks over at Rebeltraders are one of a few who FinancialSense has decided are "worthy." They, Chuck and I talked this over and they agreed to publish both the essay and the video.

They are changing their stripes Nat. You might want to pay attention to that.

Never mind that Gold hasn't done that $1300 rocketshot many were predicting, has it?

Ever wonder why?

You should.

As for Sinclair, same deal - where's that $1300, $1600, $3000/oz gold?

Hmmmm.

RE: Stop a financial catastrophe. Time is running out.

Nat — Sat, 26 Jul 2008 17:34:25 GMT

http://www.jsmineset.com/

for anyone interested

RE: Stop a financial catastrophe. Time is running out.

Nat — Sat, 26 Jul 2008 17:18:38 GMT

Remember when I told you over and over and over, and you bashed me over and over and over.

You called this website a bunch of fringe, conspiracy, lunatics and gold nuts

http://financialsense.com/fsu/editorials/rebels/2008/0725.html

Now it looks like Karl Denniger is preaching to the choir

Karl, you can't save them all buddy

Got Gold ?

RE: Stop a financial catastrophe. Time is running out.

Genesis — Sat, 26 Jul 2008 15:59:34 GMT

The Senate passed it.

We now will get to see if I'm right about the consequences, or wrong and this is "the savior."

Anyone for odds?

RE: Stop a financial catastrophe. Time is running out.

Genesis — Fri, 25 Jul 2008 14:26:27 GMT

Ps - Anyone see S&Ps response to the likely passage?

Fannie and Freddie debt put on credit watch [b]NEGATIVE.[/b]

Why?

The Government will insist on super-senior status. Therefore, their EXISTING debtholders will get raped like an ape.

You thought this was a GOOD idea? Uh, no, its a VERY BAD idea.

This is precisely the sort of thing I expected to happen, and now IT IS.

There is still time to stop this abortion of a bill - Call Martinez, Nelson and Bush.

THIS BILL MUST NOT PASS.

RE: Stop a financial catastrophe. Time is running out.

WW2 — Fri, 25 Jul 2008 12:40:47 GMT

And when half of these places "tank" there will be smaller better run version to replace them hopefully. These people must fail and they must pay the price for their failure. I for one am sick of proping up companies with my taxes that are charging me for services. How much it must suck to be one of the ones getting forclosed on knowing that when you are out on your ass you get the pleasure of knowing that not only was your payment going to that mortgage company but now the taxes you pay are also going to them. All because they didn't have the business sense to turn you down for the loan you couldn't afford. If a company makes bad business decisions it SHOULD FAIL. Propping up bad businesses is never good for us. You don't want to give money to that slacker who won't find a job and wants to just sit around the house being a drain on society, but, you're willing to give money to people who made bad business descisions? Well, hell, I'll open a bad business tomorrow, PM me and I'll tell you where to send the check....

RE: Stop a financial catastrophe. Time is running out.

Genesis — Fri, 25 Jul 2008 10:48:09 GMT

Harry, The Bond Market disagrees with you.

It doesn't matter what we think. What matters is whether the debt service requirements can be met.

Since this bill was introduced the bond market has taken 15% of your home's value by jacking mortgage interest rates. That's WITH "assurance" of this passage.

It may get much, much worse.

You can't bail someone out by taking money from one pocket and putting it in the other.

RE: Stop a financial catastrophe. Time is running out.

fishitall — Thu, 24 Jul 2008 20:07:10 GMT

.....and the meek shall inherit the earth!

RE: Stop a financial catastrophe. Time is running out.

ChrisH2O — Thu, 24 Jul 2008 19:29:38 GMT

I think we are already too late..........

RE: Stop a financial catastrophe. Time is running out.

Halfmoon — Thu, 24 Jul 2008 18:41:27 GMT

It will not be stopped because that's the whole reason it's happening to destroy our currency and introduce and new one. I wish everybody would get on board and see the real thing that is happening. It's World domination. By a few elite wealthy powerful people who (are)

Moving the wheel faster towards a new world order.

It may sound crazy but it's true. Nothing you can do about it. Just go on living and hope for the best.

It keeps on coming up on the financial news media stations all the time but it's short little interviews with people who are saying this is what is happening. It's not main stream news.

Hopefully I'm wrong!!!:angel

RE: Stop a financial catastrophe. Time is running out.

Jarhead — Thu, 24 Jul 2008 18:35:02 GMT

Wow, I was just wonderin' if the fish were bitin'.... you guys ok?:letsdrink:letsdrink:letsdrink:letsdrink

RE: Stop a financial catastrophe. Time is running out.

hebegb — Thu, 24 Jul 2008 18:24:46 GMT

[quote][b]Telum Piscis (7/24/2008)[/b]

The housing market needs to take a sharp nose dive to get in line with pay around the country. [/quote]

maybe...then millions will be stuck in houses that are not worth what we paid for them....that will hurt far worse in my opinion

RE: Stop a financial catastrophe. Time is running out.

Harry Brosofsky — Thu, 24 Jul 2008 18:21:01 GMT

And throwing us into a depression will make things all better, right?

Harry

RE: Stop a financial catastrophe. Time is running out.

Telum Piscis — Thu, 24 Jul 2008 18:04:26 GMT

[quote][b]bottomfisher01 (7/24/2008)[/b][hr]Im with harry on this one. Did you see what happened the day they found out they were in trouble? The market tanked and when the company does fail the market will tank for days.[/quote]

The housing market needs to take a sharp nose dive to get in line with pay around the country. Housing prices far outpaced what Americans could afford. Companies stretched the housing bubble out even farther than it should have went by lending to people that did not deserve the loans. Consumers also bear a lot of the resposibility as well for taking such loans when they should have known better. Just because a financial institution tells you that you can afford something does not mean that you can afford it.

The economy/housing market/companies need a sharp rude awakening to bring things back in line.

RE: Stop a financial catastrophe. Time is running out.

bottomfisher01 — Thu, 24 Jul 2008 17:50:27 GMT

Im with harry on this one. Did you see what happened the day they found out they were in trouble? The market tanked and when the company does fail the market will tank for days.

RE: Stop a financial catastrophe. Time is running out.

fishitall — Thu, 24 Jul 2008 17:25:33 GMT

I may be wrong but typically if interest rates go up the dollar strengthens which in turn drives oil prices down which puts real dollars in our pockets. There's good and bad with most situations. Oil is sold in dollars per barrell globally. Of course it could be argued that higher oil is driving the need to rapidly go to alturnative energy sources thus it is a good thing. Just thoughts.

RE: Stop a financial catastrophe. Time is running out.

Harry Brosofsky — Thu, 24 Jul 2008 17:11:55 GMT

Genesis,

I guess we'll have to agree to disagree on this one. In different times, a bailout may not be the best idea, but right now, if FM and FM fail, the market will tank, jobs will go away, welfare and bankruptcies will skyrocket, etc. It's all about consumer confidence. It may be delaying the inevitable, but hopefully when they finally do fail, the economy will be better able to handle it.

Harry

RE: Stop a financial catastrophe. Time is running out.

Nat — Thu, 24 Jul 2008 16:01:19 GMT

I agree with Genesis ...........for the first time

They cannot be fixed, so this is just a delay taht will make the final outcome worse, rather than better

You will witness the destruction of a our curency

http://www.youtube.com/watch?v=-VV6ST1Pmk4

http://www.youtube.com/watch?v=ubkM9VX2qdQ&feature=related

http://www.youtube.com/watch?v=O5vEM-FlMtg&feature=related

RE: Stop a financial catastrophe. Time is running out.

Genesis — Thu, 24 Jul 2008 13:39:50 GMT

Harry, you are wrong.

Fannie and Freddie can't be fixed. They're geared at somewhere between 65 and 200:1, depending on what you count and how.

The money simply isn't there.

If we bail them out, we will add a trillion to our federal debt immediately. This will spike the long end of the yield curve.

The result will be much higher mortgage rates.

And every other kind of interest rate. Not just on houses.

If they blow or go into runoff, we will get higher mortgage rates.

But other parts of lending will be unaffected.

If you want to see massive unemployment, cut off credit to business and you will make that happen. If we backstop Freddie and Fannie, there is a very high probability that we will see exactly that.

This bill is a monstrous mistake, and significantly raises the risk we will have a Depression.

RE: Stop a financial catastrophe. Time is running out.

DreamWeaver21 — Thu, 24 Jul 2008 13:23:10 GMT

I take risks some work well some fail miserably. Fannie Mac took some big risks that didn't pay off. Boo hoo. Take your lumps, learn and move on.

RE: Stop a financial catastrophe. Time is running out.

Ultralite — Thu, 24 Jul 2008 13:11:52 GMT

:letsdrink

RE: Stop a financial catastrophe. Time is running out.

Harry Brosofsky — Thu, 24 Jul 2008 13:07:27 GMT

Yeah...that's a super idea...let Fannie Mae and Freddie Mac fail, then the economy will come crashing down, fuel will increase even more, taxes will go up to pay for more welfare, bad debt, etc. On the bright side, you'll all be out of work (I work for Uncle Sam, so I'm safe) and won't be able to afford internet access...I'll have the board all to myself. Just because someone says it's bad politics doesn't make it so.

Harry

RE: Stop a financial catastrophe. Time is running out.

WW2 — Thu, 24 Jul 2008 12:59:18 GMT

Just like you should stop saving stupid peoples lives, you should stop bad business.

Stop a financial catastrophe. Time is running out.

Genesis — Thu, 24 Jul 2008 12:30:21 GMT

We are running out of time.

http://market-ticker.denninger.net

The Senate votes some time between now and Saturday, unless we stop it.

We had better stop it.

Pensacola Fishing Forum / General Discussion / Off Topic / Stop a financial catastrophe. Time is running out. / Latest Posts

RE: Stop a financial catastrophe. Time is running out.

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RE: Stop a financial catastrophe. Time is running out.

Opportunities & Threats from the "Paper Money" Regime

by DeepCaster LLC, deepcaster.com | August 1, 2008

Richard Russell, “Richards Remarks,” dowtheoryletters.com, March 27 2007

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Opportunities & Threats from
the "Paper Money" Regime