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djswan
millennium club
Joined: 17 Aug 2007
Posts: 1158
Location: Montana, USA
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Antisthenes
Joined: 28 Nov 2006
Posts: 756
Location: Phoenix
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 Posted: Fri Feb 13, 2009 1:53 pm Post subject: |
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unless they take over the banks we're fuct
watch democracy now today?
_________________
The most necessary/useful piece of learning is that which unlearns what is untrue: 'evil'
may be acquired, Happiness through virtue which is based on knowledge!/? |
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justellus
Joined: 22 Jan 2009
Posts: 209
Location: World Wide
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| Posted: Fri Feb 13, 2009 2:33 pm Post subject: |
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| Antisthenes wrote: | unless they take over the banks we're fuct
watch democracy now today? |
It would be interesting to know the ideas being presented on democracy today on these subject matters.
So why do some believe they should completely "take over the banks"? |
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HorizonDesign
Joined: 31 Jan 2009
Posts: 57
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| Posted: Fri Feb 13, 2009 6:27 pm Post subject: |
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The ideas previously suggested will work. However much work needs to be done, to refine all the plans and particularly Plan III. This should be expanded, to include overhauling the banking industry entirely.
Now, some suggest that at the start Obama seemed to have started off on the wrong foot, only expanding what Bush was doing. The idea is to increase spending to get us out of the mess? Our current problem is financially based, and no spending will be able to fix bad finances and a system that is not working. The only solution is to reform the entire system.
But with Obama's latest speeches, and Geitner's presentation yesterday, clearly his administration is adopting some new unique directions. The question is whether he will hang on to the ideas and methods of the past, and as some state, "pathetic ideas", or be able to completely reform the current system, as suggested. The moment to do it is now, not later on down the road. The question is how much the status quo and current non-functional system will attempt to restrict us from bringing about the changes needed in America now.
Taking over the banks seems a great solution as well, and no longer allow a few banks to call the shots in this country. The people need to own the banks. If they give public money to the banks, they are only privatizing profits and socializing losses, as these big banks do not work in the interest of the public, so why keep giving them money? And even with so much money given to banks recently, one could argue in big part the shares are public. But the interests remain private, and will go against the public good ultimately, and not serve our national interests. Some believe thus the only way is to reform the entire system and take over completely all existing big banks. Obviously this solution would cost to much and also is beyond our means to implement. But the previously suggested ideas are a great start, as long as we do not keep paying private banks 6% interest on everything we borrow. This needs to change. However, with the size of the current national debt, this is difficult to change and with the current structure, we are as a nation in a real manner forever debtors to these banks.... so in this view, it seems still hopeless to try everything and not yet change the basic system.
And now, nearly a quarter of the government's 700 B recent bailout has gone towards propping up top banks. This is no longer sustainable. As long as we allow these private banks to control the market for mor debt, it is truly hopeless to expect we will be able to find a permanent solution. This is why again, some believe that the only solution is thus to nationalize all banks and completely reform the entire existing system. Since this cannot all be accomplished at once, the ideas of getting around the banking system, by using public leverage to stimulate private capital seems to be a good start, although we cannot be certain to what degree and size it will grow. But is is clear that a majority of new loans will end up originating from this parallel system, since the standard banks are not currently able to give out significant amounts of loans. The only question is how much liability will all this still be creating to tax-payers in terms of indebtedness to the Big Banks that thus far have been running the interests of this country, and to whom we are forever enslaved to pay back now that the past government has rolled out almost 8 trillion of recent commitments and expenditures, and growing. So how is anyone going to fix this mess now they created for us? |
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djswan
millennium club
Joined: 17 Aug 2007
Posts: 1158
Location: Montana, USA
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| Posted: Tue Feb 17, 2009 8:42 am Post subject: |
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Bad money chasing bad money. This isn't the change I voted for.
America built McMansions in it's hayday and it's falling apart.
Demolish the architectural garbage, there's nothing worth salvaging.
_________________
An event is to chaos as function is to form. n/a
http://www.facebook.com/pages/Kalispell-MT/Swan-Woodworks/74815304856 |
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HorizonDesign
Joined: 31 Jan 2009
Posts: 57
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| Posted: Sun Feb 22, 2009 9:00 am Post subject: |
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Some ideas were posted on previous page as solutions.
(particularly, as posted: Wed Feb 11, 2009 7:24 am)
Actually, some of these ideas are being implemented and according to Jubak, the Treasury may "save the day after all" -->>
http://articles.moneycentral.msn.com/Investing/JubaksJournal/treasury-may-save-the-day-after-all.aspx?page=2
| Quote: | | Geithner's idea of having the government provide guarantees against loss to private investors who buy assets off the balance sheets of troubled banks is the best and cheapest way -- indeed, maybe the only way -- around the problem that nobody really knows what this stuff is worth. And it's this high degree of uncertainty, the possibility that an investor could be paying 40 cents for something worth only 20 cents, that has kept private money on the sidelines even as banks have been desperate for capital. |
As can be seen, this was suggested as well above. So the ideas remain valid, particularly nb. 2 - 2. "Offer government backed guarantee on the investments..."
In the end, some type of holding bank could also help for many cases or classes of mortgages. They must be properly weeded out, before this can be set - up effectively. So the idea remains good, if properly done in due time.
What was most beneficial was as expressed in this idea:
| Quote: | | "mortgages.......shall be .....guaranteed by the government..... and any private investors who own shares of these will be guaranteed a return on investment in either the form of interest, government bonds, government assistance in setting up private pools of sub-lending companies, new mortgage companies to hold the investments until the economy recovers, with government backing of these." |
and Jubak states:
| Quote: | Potentially a profit for taxpayers
By guaranteeing private investors against loss, Geithner has proposed that the government buy the downside risk in these assets. And by buying the downside, the Geithner plan would make these assets much more valuable. They would become options on the potential upside for the asset over time.
This wouldn't make it any easier to calculate the "real" price of assets for which there is no actual market. And it wouldn't make the future price of these assets any less uncertain. But it would do a pretty good job of converting that high degree of uncertainty from a liability into an asset. Yes, you still might be buying an asset worth only 20 cents with your 40 cents, but thanks to the government guarantee against loss, you wouldn't worry about that possibility. What would be valuable to you would be the chance that the asset you bought for 40 cents could go up. Uncertainty and volatility would go from being negatives to positives. Of course, the government -- which, we all know, really means the taxpayer -- could get stuck with massive losses if it guaranteed a lot of assets at the wrong prices. Geithner's plan to have the government co-invest in these assets with private investors, after the government has stress-tested the assets, promises that investors would get some profits. If we were lucky or government regulators were really good, taxpayers could even make a profit from these investments. |
Something similar to these ideas is in effect being put into practice, as the public authorities backs up the mortgage investments as a means to shore up their value and re-gain investor confidence, and thus help build back up the banking industry as well, once the value of the same is backed by a type of public insurance. So in effect, the government need not purchase these, only shore them up with a type of government backing. So this, in summary, was the essence of the idea proposed that we see as being the key now to solving the crisis and bringing the situation back to normalcy.
So, in effect, we begin to see these ideas incorporated and the leaders quickly implementing these ideas, and ideas similar to as suggested. All the enginuity in the world and creativity is needed to solve this crisis, and this America has to it's advantage - we are a nation of creative solutions.
So calm down markets. All we need now is a boost of confidence.
Precaution is needed, as a note, to guarantee the success of this plan. They must be careful so as not to provide backing on those which were not properly securitized and those which are based on invalid documentation:
Obama Unveils $75B Mortgage Relief Plan
| Quote: | | House Republican leadership and Senator Charles Grassley, R-Iowa, ranking member of the Senate Finance Committee, sent letters to administration officials asking for assurances that anti-fraud measures will be put in place to guarantee that taxpayer dollars are not used to re-do mortgages that were originally based on fraudulent documentation. Grassley notes that experts in mortgage lending say that anywhere from 30-70 percent of all mortgages inked in the last few years were based on fraudulent claims of assets or income. |
http://www.cbsnews.com/stories/2009/02/18/politics/100days/economy/main4808886.shtml?source=related_story
With so many mortgages built on shady, incomplete documents, this makes also a strong case for intervention in these, and the need for weeding out the good from the bad. So more assurances are needed from public leaders as well to guarantee our money is not badly spent.
One can see that the weaving of paper work and documents is quite complex, and an urgent huge task force is needed to evaluate all those documents, and classify the loans into ratings for public purposes, so only those with the highest ratings can be publicly backed, and the documents of others be immediately turned over to public holding institutions, with re-working of payments to buyers, until the full nature and quality of their origin can be determined. Those which do not pass the test means these the courts can modify the principal and payment terms as they determine is best. In cases where the irregularities are extreme, these should be set aside for further analysis and and even temporary holds can be placed on these loans. They can then also be mandatorily re-financed to buyers on easier terms.
This is why a temporary hold on repos of questionable loans will be eventually needed, for those which are based on shady documentation. Thus, all mortgages should be produced and evaluated for their quality. In the meantime, the current program of rescue is implemented, and buyers continue with payment. Those which pass the preliminary consultation of quality check with flying colors are immediately inserted into the program. Those which do not clearly pass (the 30 to 79 percent) should be dealt with more caution. They are truly the greatest bulk of the problem as well. Until ownership is determined, and documentation is produced, payments on these can be allowed to continue, but with the money being placed in a public holding trust, with profits guaranteed to investors the same, but only a basic unitary profit paid out during the time needed to unravel these. Eventual profit is paid thus in full only to original loan owners and to share-holders of these, as the shares are properly dispersed with time. In the meantime, the investors continue getting a basic return on these that is pre-set by their market value, which they are under public evaluation. This period can be established as 3 to 5 years. So this will allow for the freezing of their value as well, during this period of evaluation. These also then can be re-negotiated on easier terms back for the buyers, during this period of evaluation. These also receive public backing of value, but separate criteria shall be adopted according to the preliminary evaluation of "possible loan quality" (since the actual quality can only be established over a large period of time of about 3 to 5 years after all these are evaluated by separate agencies which shall demonstrate total transparency and honesty in the evaluation process).
So more solutions are being found, and with time these as well can be refined.
So calm down markets, solutions are on the way. |
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qerra22
Joined: 24 Feb 2009
Posts: 1
Location: USA
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| Posted: Tue Feb 24, 2009 6:58 am Post subject: Crisis |
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Alternative energy sources are, I think,
and there is that direction which will deduce the world from crisis.
The epoch of oil and gas monopolies will end.
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hotels in wexford |
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Antisthenes
Joined: 28 Nov 2006
Posts: 756
Location: Phoenix
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| Posted: Tue Feb 24, 2009 8:58 am Post subject: |
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Z day March 15th
_________________
The most necessary/useful piece of learning is that which unlearns what is untrue: 'evil'
may be acquired, Happiness through virtue which is based on knowledge!/? |
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justellus
Joined: 22 Jan 2009
Posts: 209
Location: World Wide
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| Posted: Wed Feb 25, 2009 9:37 pm Post subject: |
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This other topic in another forum makes interesting remarks on the application of green technology towards development and growth of cities:
| Quote: | | Freiburg in Germany is considered the green capital in this country thanks to the factories of solar cells, the construction of energetically superavit new neighborhood to proportion energy to the rest of the city too -Solarsiedlung -. |
http://arch.DesignCommunity.com/topic-23166-0-asc-15.html
Note how when green energy is produced, as discussed in this other thread, it can be exported to other areas, thus spurring economic growth.
And further:
| Quote: | Crisis, what crisis? Probably the canary island of El Hierro is going to be the first in the world to be self-sufficient thanks to renewable energies (http://en.wikipedia.org/wiki/El_Hierro ) using coastal dams that carry up the sea water thanks windmills for get after hydroelectric energy. Some hundred of thousand of new employments were created recently in Europe thanks to renewable energies, reducing fossil fuels payments, getting new productivity from underestimated “local” resources like sea water, wind, sun, etc, and developing in addition new branches in industry that now exports knowledge.
Productivity appeared! |
So we get increased productivity by applying renewable energies, as can be seen in these examples mentioned in the other discussion. Thus renewable energies are the future towards creating massive new employment in large scale green energy projects.
| Quote: | You can repeat the initiative of El Hierro i.e. in some located points of the Australian coast, Texas or California for get energy and water (in last case avoiding throw brine to the sea investing double in energy during the process), enriching the possibilities in the territory. I.e., one of Obama administration priorities is adapt million of houses for get them more energetically efficiently, tuning them.
Well, in this occasion comes too with a greened look…, begin forget the sub primes because soon many houses will be considered more valuable in a wet atmosphere, real economy steps with financial economy and nature! |
So the sub-prime mortgages, by being updated and made green and mean, thus will help defer the crisis, as suggested earlier in this discussion here. So Obama has well adopted these ideas as well.
| Quote: | | ....soon the thermal effects of the Water Cube of Beijing will be extended to facades through microorganism capsules, film, etc, and the “and” of buildings will expand from simple mineral (stones and so) walls to complex mineral like the example, and too mixing of mineral and vegetable, mineral or animal, vegetable and animal walls…, in fact we´ll design walls like sandwich or hamburgers, with all ingredients you want. And, and this is astonishing, you can manipulate nanotechnology to create “real virtual” buildings thanks to materials that make the walls always invisible, or temporally. |
The new unique possibilities of microorganism technology as applied to architecture can be seen as a green technology also to be further exploited in cities to also modernize our industries in the process, and thus creating more jobs in the process.
| Quote: | | What is more, is a relax stop heavy or futile discussions because you know that there is always some person in the world who got a solution – or an interesting approach - respect each conflict point and implement it, normally without have been sufficiently announced in media, academics, web, etc. |
This is so true as well, with many ideas and solutions being proposed, yet the authors not being credited for their ideas.
| Quote: | | In this proposed context, economic booms or cyclical crisis maybe responds more to collective hysteria with hard social consequences than to reality. |
This is exactly what we are seeing today as well. The current down has much to do with collective hysteria as well, so our leaders need a crash course on building public confidence, so we can think objectively and get back to reality. To much hysteria combined with hurried behavior can lead us down dangerous paths of solutions that are being adopted without thinking about the full consequences of the same. |
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Ale
Joined: 05 Mar 2009
Posts: 1
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| Posted: Thu Mar 05, 2009 8:01 pm Post subject: my idea |
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I was following the meeting about Health Care today…Obesity, Prevention…Also the news on CNN… There was an interview with a lady that had already gone through another recession and she was giving tips. One of her tips was to save leftovers and don’t throw them away. It left me puzzled: shouldn’t we do that on a regular basis? I personally hate to throw away food. It seems obvious that we don’t need to survive this recession, we need to change habits, values, right from the roots or else we will find ourselves facing the same problems over and over again. We all need to change, for a real change! We don’t have to throw away leftovers in bad and in good times!!!
I cannot remember what train of thoughts made me realize how we could solve a lot of today’s issues.
It may sound silly to some of you, but believe me it’s not…not at all actually. That’s why I decided to write down my idea.
Think about it!
Kids (the roots of our society) growing up eating junk food (obesity, diabetes, cholesterol, heart problems)
Kids not being properly followed (crime, drugs, alcohol, gangs)
The list can go on and on about today’s family issues…
What is really missing? The role of a Mother…therefore a family the way it used to be.
There has been talk about stay at home moms being paid for what they do…wouldn’t now be the right time to create this new government job??? Wouldn’t it be money very well spent?
It will have to be regulated and very well conceived but wouldn’t it be a great step ahead in our society??? The United States of America being the first country in the world to give women this wonderful opportunity.
Who can deny the irreplaceable role of a mother in the family, in the community, in the society!!! This role has been abandoned because nobody ever recognized it as the most important, as a position of great responsibility: the future of humanity.
It will have to be regulated as any other job: application, interview, training (not all women can cook, for example) etc., etc.
Families will be saving money now dedicated to daycares, restaurant food (therefore health), gas and much more as well as a lot of trouble and stress that can even destroy a marriage.
I would love to know how many women would trade their jobs for this! Or men! Why not!
This “new” job will free up other “outside” jobs…It will create more jobs for those who will have to supervise it (just like a job from home) and it would benefit every aspect of our communities. |
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justellus
Joined: 22 Jan 2009
Posts: 209
Location: World Wide
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| Posted: Wed Mar 18, 2009 6:47 pm Post subject: |
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Mortgage backed Securities Being Shored-Up by the Fed
http://articles.moneycentral.msn.com/video/default-ap.aspx?cp-documentid=85001022-8077-4a8a-817b-0bf0086c770f%26tab=Market%20News
| Quote: | "Hedge fund managers will go to the Prime brokerage in the world, the Fed, and will borrow 9 to 1 and buy a "big basket of mortages"."
The Fed is saying, "here is cheap money, go make the spread. Get back involved". Bernanke - I know he is a professor, but...
"Man the guy is good". This is unb-believable. (Happy with mortgage reduction, due to Fed purchase of mortgage-backed securities).
A year ago he was never near this point.
"This is the Holy grail of turning around both the housing market and the hedge fund market, which we need.... |
So what is the solution that was proposed before?
http://arch.DesignCommunity.com/topic-22745-75.html
as mentioned: | Quote: | " They are considering the idea of combining private investors with government money, as suggested yesterday. "
"4. They are implementing the plan suggested, of 1 to 5 years (item Nb. 4 on our list) into what they call "non-recourse" loans, to create leverage and prevent tail risk. Thus, they want to create a type of program to offer government or Federal Securities combined with private investor assets, to facilitate the re-working of loans and sharing of burden among private investors and government funds, as was suggested yesterday.
(Item nb. 4 - Asset Backed Securities Loan Facility is essentially what had been suggested here yesterday).
5. They believe they will be able to create 1 trillion in leverage using these ideas, as had been suggested. "
....and even on Feb 12th they weren't quite there yet, as the bad bank idea was still being considered. But the new plan scraps this bad bank idea but brings in the best of the core idea as suggested - to create leverage by attracting private capital to invest into gov security backing of mortgages, thus shoring up the value of hedge fund investors and removing the bad assets form the bank sheets. The key, that was suggested and is being implemented, is to mobilize and leverage private capital. The initial idea was to use capital from the Treasury as a bridge to private capital. Now the resources of the Fed are being brought in, as a means to create a new leverage, by the purchases announced today. |
So these ideas were not truly from Bernanke in the first place. They had already been formulated previously and posted here, and also in various gov exchange of ideas, and had been announced by Geitner previously.
http://articles.moneycentral.msn.com/Investing/JubaksJournal/treasury-may-save-the-day-after-all.aspx?page=2
This article quotes it as Geitner's idea, not one of Bernanke. So perhaps the credit is being mis-placed. And the ideas had been developed in this thread in embryonic form, prior to being announced by Bernanke.
Here is the link to the details of the new plan now:
http://articles.moneycentral.msn.com/Investing/Dispatch/market-dispatches-031809.aspx?icid=dispatch_090318
Will it work? All points to a successful plan, with the key ideas as being suggested implemented.
Creating a new line of leverage by using government securities to back up and create leverage to private capital, as had been suggested previously. Rather then transferring the toxic mortgages to a "holding bank" the Fed is now shoring up their value, by proposing to combine private capital with government backed securities.
Will there be real liquidity in the market-place? Hedge funds are looking at all these securities, saying there is an opportunity, so that I can put that 9 to one leverage. Some believe it is difficult to get liquidity at the prices we are seeing. So they are saying the profit or interest rate is to low to generate liquidity and open up money, investing it into the new securities? Only time will tell.
Some forceful betters believe that these new hedge funds investments will rule in the next year.
A Removal of Risky Investments as a Means to Liberate Private Capital and Shore-Up the Value of Financial Institutions
So the Fed essentially, in purchasing 750 billion in mortgage backed securities from Fannie Mae and Freddie Mac and $100 billion in debt from Fannie Mae and Freddie Mac, is essentially a clever more to re-capitalize the financial institutions, by removing the risky investments from their books in phase I of the plan to launch the new securities into the market for the hedge fund managers to come in and buy with private capital, being lured by the 9 to 1 spread being offered to those who will purchase the new Fed backed securities. |
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djswan
millennium club
Joined: 17 Aug 2007
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Location: Montana, USA
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justellus
Joined: 22 Jan 2009
Posts: 209
Location: World Wide
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| Posted: Wed Mar 18, 2009 8:00 pm Post subject: |
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The idea above by Ale seems to suggest creating community centers where mothers act as role models and supervise groups of children, for which they cook and take care of. This will replace conventional day-cares and supplement households who are not able to take care of their own children. It is a transfer thus from private day care centers to publicly sponsored centers that will provide more then day care, but provide support and serve as role models for the children.
Another branch of the idea would be to pay qualified Moms to stay home and take care of the children that would otherwise be in day care centers.
So we have two possible models. Which one is favored?
Will society really support the second, paying private families to take care of their children, when other mothers are not being paid?
In the first model, it is a type of a day care center, but much more, as it functions as a new type of family for the children. The models who would lead these new centers would thus function as the counselors, the cooks, those who will care for the children and be their mothers during the day when the real mothers are off to work. Or the real mothers who would otherwise be off to work can go work in these new community centers. Perhaps they should function non-profit and receive government sponsorship, thus providing wages to those who work there. Or they can receive private donations from companies and organizations who can receive publicity by supporting these new community centers. They can provide education, counseling, and also typical family functions such as monitoring of teen behavior and helping to avoid teens from going in wrong directions, by coordinating this monitoring under parental supervision. Thus, many roles that families provide to a limited degree, or are not able to provide would either be supplemented or provided by these community centers. The degree of involvement could be determined by the desires of each family and groups of children can be separated per category of leader involvement in their lives. The children however may not like such involvement, and it would require building relationships of friendship. Perhaps having the children work there as well producing valuable goods that can be sold on the market would help to involve them in the community spirit and help them integrate into a new type of family environment. This model could work as well.
Certainly this would be a wise use of public funds, as it could help to reduce delinquency in children and supplement many of the roles that families today are no longer able to provide. Such groups also could be maintained at later stages, where groups of children remain in contact for life, exchanging business ideas and creating partnerships in later years. So it could also partner with leading universities, placing the children into the proper social context for success.
Many ideas can be brought in to make these community centers profitable and generate the funds needed to pay the working mothers. And mothers who work at home can also be producing home made durable goods that can be sold at the community centers, thus raising funds to pay for their own wages. The centers could then function somewhat autonomous, with a reduced need for public funding and be the new self-sufficient models for busy societies with mixed groups of working families with varying needs. We only need to be careful not to re-create a society to the point where mothers will only stay home if there is a financial vested interest involved, rather then out of love for the family. Now, if women can be encouraged to do what they do well, and receive some compensation in the meantime, then we would only want to encourage primarily that women stay home and the traditional model by supported, rather then allowing these new community centers to replace the need for mothers to stay home. So an optimum balance needs to be achieved, of say 70% of women involved at home working mothers and only a small minority of women working in the supplemental community centers. But will all involved being helped in some way and receiving an additional or primary income in the process. |
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djswan
millennium club
Joined: 17 Aug 2007
Posts: 1158
Location: Montana, USA
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| Posted: Wed Mar 18, 2009 8:20 pm Post subject: |
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I've got to be honest, I'm like my ideas best, so far, and they get me futher to my goal of raising crawdads. Giving me money for my crawdad farm is wise use of public funds. I'll hire kids and pregnant mothers to tend to the crawdads, an untapped labor source. We'll all benefit and who doesn't love crawdad meat?
_________________
An event is to chaos as function is to form. n/a
http://www.facebook.com/pages/Kalispell-MT/Swan-Woodworks/74815304856 |
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HorizonDesign
Joined: 31 Jan 2009
Posts: 57
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| Posted: Thu Mar 19, 2009 7:52 pm Post subject: |
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Shadow Banking System? What in the world is this?
http://articles.moneycentral.msn.com/Investing/SuperModels/a-credit-crater-too-big-to-fill.aspx?page=2
They claim now the shadow banking went on completely unregulated?
How could a "shadow banking system" of this magnitude have been so unregulated? This is simply not believable.
| Quote: | Federal Reserve and Treasury Department apparently decided that they would declare war on the so-called "shadow banking system". These were the hedge funds, structured investment vehicles (SIVs) and other non-bank entities that had grown up since around 1995 to create, leverage, re-leverage and distribute roughly $10 trillion in debt.
Pimco co-chief Mohamed El-Erian has called this the "global liquidity factory," but no matter the name, these unregulated entities created oceans of money that flowed luxuriantly to everyone from credit card users in North Dakota to bankers in Iceland and builders in Thailand.
The shadow banking system worked so long as everyone at the base of the system paid their loans on time, but economic stresses of the past year have tested that concept, and it has flunked. Governments have closed the liquidity factory by ordering the SIVs and conduits onto banks' books, smothering the hedge funds by extinguishing their key prime brokers, Bear Stearns and Lehman Bros., and through the September short-selling ban that led to mind-blowing losses.
There are hundreds of Watanabes and as much as $3 trillion to $5 trillion in similar deals coming back onto bank balance sheets from CDOs, SIVs, currency swaps and the like, according to banking expert Das, so you can see that governments' effort to recapitalize banks experiencing a run of de-leveraging is not trivial. They will back up banks to the minimum required for solvency, but not anywhere close to their previous free-lending glory. This is why capital is at a standstill and why any business plan dependent on credit is now suspect.
Das said the bottom line is that de-leveraging is like an epic flood. Governments can't hold it back; they can only channel it. The public expects them to actually save the day just as they did after the 1987 equity crash, the 1991 real-estate crash and the 1994 junk-bond crash, yet none of those blowups involved an equity, credit, commodity and currency crash all rolled up in one. |
So what is being "shored up" and are not tax payer dollars again being used, due to the lack of regulation in the past of these "shadow operations"? Can anyone believe something of this magnitude could really have gone so long un-regulated? It is simply not believable. The facts just do not add up. Reality is, they are trying to re-capitalize the institutions that control the credit and are at the heart of creating the entire shadow banking system, with the "look the other way" blessing from those in charge in the highest ranks.
So when we see billions being poured into AIG, all these banks benefiting from AIG are only being leveraged back? But who are these banks anyways but the same that are part of the Fed private banking system that creating and allowed for these leveraging mechanisms in the first place? It is like declaring war on something they encouraged, fostered, and that the banks were profiting from, in creating 9 to 1 leverage and by the creating of major new capital from the loans being made. While it was benefiting all, they looked the other way. Now they claim they never knew of this shadow banking? Is this like saying, "we didn't know of AIG bonuses being paid". They always say this, "we didn't know". Then they turn around to shoot themselves in the foot for something they allowed to happen in the first place but that went sour. So now they think all can be so easily fooled. Those who fostered and allowed the shadow banking system to grow, and create a huge mass of money from nothing, by using the incredible power of 9 to 1 leverage, now want to kill the monster they fostered, but now, with public money and by public debt?
It is obvious it was not unregulated, all along. Or it was intentionally un-regulated. It was a system they were using to their advantage, until it came crashing down. Now with all the digital green backs disappearing, they first blame it on the mortgage crisis, and now the true nature of the problem is becoming ever more clear. The shadow banking system which the central banks not only fostered, but were profiting from. It created the derivatives mess and the credit default swaps mess by breeding and allowing for it, in the entire shadow banking system structure which had been allowed to run unchecked, as long as it was working for all. Now these same banks are being bailed out with public money, in an attempt to re-leverage these failed institutions? Why should public money be used to save a crooked system which created all these complex hedge funds and derivatives? This is nothing short of a crime and mis-use of public money. Why keep re-capitalizing banks with public money, pouring billions into a deep black hole caused by greed? How far must we put up with these atrocities? |
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