Denninger vs Stupid Americans « Thread Started on Nov 7, 2009, 12:38pm »
The Obama administration has spent Trillions of taxpayer dollars giving fortunes to the banking class while becoming the majority mortgage holder. Obama did not buy jobs for Americans. Obama is a puppet of the banking class and financial institutions.
Denninger rants very effectively so to how well the banking class has done and continues to do with Obama and Congress. Denninger expects collapse and cites the "doom loop' phrase from the UK.
Denninger is wrong to expect change from Obama and Congress. I expect the end of the financial system as we know it. Denninger warns this may happen. I expect it definitely will become DOOM.
Denninger writes that Americans are not stupid.
I disagree.
Americans are stupid.
Americans still support Obama and ignore the vast fortunes being stolen for the banking and financial institutions.
More Extortion By The Banks Yeah, that's a strong word.
In my opinion it is also the only word that's appropriate for the circumstances:
The Fed has been informed by dealers that they would be willing to enter into very sizable amounts of reverse repos with the Fed, if asked to do so, provided they could get some relief from Tier I capital constraints, MNI also understands.
Ah, the old "let us lever up and we'll do it, but if it blows up, we'll then be back at the public trough for another bailout since we're too big to fail."
Two words need to be spoken to these clowns by Congress; the first begins with "F" and the second with "Y".
It was precisely the relaxing of leverage limits by Congress and The SEC that got us into the mess in the first place. Henry Paulson, you remember, got the former 12:1 leverage limit dropped, and the consequence is now known.
BEAR STEARNS, AIG, LEHMAN, FANNIE AND FREDDIE - ALL BLEW UP SPECIFICALLY DUE TO EXCESSIVE LEVERAGE. ALL HAD MORE THAN DOUBLE THE PREVIOUS LIMIT.
ALL OF THEM.
NONE OF THEM WOULD HAVE BLOWN UP UNDER A 12:1 LEVERAGE LIMIT.
LET ME REPEAT THAT: NONE OF THEM WOULD HAVE FAILED HAD THEY BEEN OPERATING UNDER THE FORMER LEVERAGE LIMITS.
Zerohedge reported back on October 21st that the repo test was allegedly "a failure." We now have confirmation that it indeed was, and in addition, we now apparently have the primary dealers - once again these are the "really big oligarchs" - Goldman, Morgan Stanley, JP Morgan, Citibank, etc - that are now twisting The Fed's arm to allow them to do exactly what caused the meltdown in the first place as "compensation" for entering into these reverse repos.
We also have this:
Amid the ongoing financial regulation overhaul, the banking industry is hoping to pull off a quiet power grab that has eluded its grasp since the Great Depression, by stripping the independence of the board that sets financial accounting standards.
The move could effectively let banks set their own accounting standards in rough economic times.
That is unbelievably outrageous. The bottom line is that the banks feel that not only was the blatant extortion pulled this spring with "mark to market" appropriate, but now they want the ability to force changes to the accounting rules any time they get in trouble to make it look like they're all ok when they're not!
Not one thing has been done about what got us into this crisis. The causes of this mess are:
•Asset bubbles blown by intentionally loose monetary policy coupled with intentionally-absent regulation and monitoring. None of that was a mistake - it was willful blindness and intentional promulgation of known-dangerous policies.
•A legal structure that has allowed banksters to asset strip Americans. Specifically, the law explicitly allowed the peddling of so-called "mortgages" that were designed to not be affordable beyond their "teaser expiration", thereby guaranteeing that the applicant would have to come back for another bite at the apple. In addition Congress has both allowed unlimited interest rates to be charged on credit cards and (at the banksters behest) made dramatic modifications to the Bankruptcy Code that had the effect of turning many debtors into debt slaves, prohibiting discharge of those debts in liquidation. At the same time corporations can and do file bankruptcy without the same consequences for the directors and officers of the firm!
•Intentional lobbying for (by Henry Paulson when he was with Goldman Sachs before becoming Treasury Secretary), the granting of, and then full utilization of ever-increasing leverage. As noted above every single one of the large bank and bank-style institutions that has failed had more than double the formerly-level "investment bank" limit of 12:1 leverage. The housing asset bubble could not have effectively grown beyond 2004 without this change as investment bank capital requirements would have stopped it in its tracks.
•Willful and intentional blindness to insolvency in financial institutions. The FDIC has been repeatedly found wanting in this regard, in that of the over 100 banks that have failed essentially every one of them has been "underwater" at the time of seizure, typically by 30, 40 or even 50%. Prompt Corrective Action (12 USC Ch 16 Sec 1831o), if actually followed, makes this outcome impossible. More than two years into this mess our banking regulators including the FDIC, OCC, OTS and Federal Reserve are still willfully and intentionally refusing to follow the law, for the simple reason that if they did they would have to have seized hundreds of banks including several of the "too big to fail" ones. The economy cannot resume sustainable growth and health until and unless the causes of the mess are remedied, as all of the above have led to unsustainable debt levels throughout the economy. The current "remedy" being applied is to pretend the bad debt does not exist, pretend the excessive leverage does not exist, and meet the cash flow requirements by loading even more debt into the Federal Government. This is a Ponzi Scheme writ large that is unsupportable in the medium and long term as a consequence of mathematics, irrespective of whether or not policymakers and banksters want the scams of the last two decades to continue.
This says the following things to me loud and clear:
1.EVERY ONE OF THE LARGE BANKS HAS TO BE BROKEN UP RIGHT NOW. They are ALL a public menace and have learned exactly NOTHING from the pain they have inflicted on America - and from which America is still suffering with sky-high unemployment, 30% interest rates on their credit cards and more. No firm that is "too big to fail" can be allowed to exist and any firm that makes this argument in any form must be deemed to have declared its own demise. Glass-Steagall had this right - the depository and fractional lending function is a public utility and must maintain absolute separation from the other other areas of finance, including but not limited to securities dealing, proprietary trading and insurance. Glass-Steagall prevented these destructive "boom and bust" cycles for nearly 50 years; they returned only after it was repealed and we have now seen four (LTCM, Latin America, The Internet Bubble and Housing Bubble) in less than three decades, with Citibank in particular having to be bailed out at least three times all on its own. The evidence is incontrovertible.
2.MARK TO MARKET MUST BE BROUGHT BACK RIGHT NOW ACROSS THE BOARD AND ALL OFF BALANCE SHEET STRUCTURES MUST BE BANNED. This gaming of the regulatory environment is beyond ridiculous - it is blatant robbery.
3.THE BANKS WILL NOT BEHAVE RESPONSIBLY UNLESS FORCED BY EITHER THE THREAT OF MARKET DISCIPLINE (BANKRUPTCY) OR THE BOOT OF GOVERNMENT REGULATION ON THEIR NECKS. They will in fact attempt to use their position as primary dealers to force The Fed and Congress to allow them to take more and more risk once again siphoning off the wealth of Americans for their own personal benefit until they blow up the world again, at which point we will hear once again threats of imminent "Armageddon" unless we shovel in yet more taxpayer funds and guarantees.
4.THOSE INSTITUTIONS AND INDIVIDUALS WITHIN THEM IN OUR GOVERNMENT WHO THUMB THEIR NOSES AT THE LAW AND SOLID PUBLIC POLICY MUST BE REMOVED AND REPLACED. Prompt Corrective Action (Title 12 Ch 15 Sec 1831o) is sufficient to prevent losses from being taken by the FDIC's Deposit Insurance Fund - if it is followed as written. Mark-to-market may cause many banks to go out of business, but that process of bankruptcy will also resolve the excessive leverage and debt, forcing asset prices to sustainable levels. Leveling the playing field between corporations and individuals with regard to bankruptcy may force rates of interest to rise, but appropriately pricing risk is necessary for sustainable economic growth. Raising The Fed Funds Rate may be politically difficult, but doing so will cause lending to resume as the "risk free" trade of borrowing at zero and buying 10 Year Treasuries at 3.5%, then swapping off the interest rate risk (without any nightly mark-to-market for the counterparty!) to yield 300 basis points (radically in excess of normal "AAA" credit risk profits) will disappear. You're seeing some evidence of recognition from over in the UK, to wit:
On the eve of the G20 meeting of finance ministers in Scotland, Andy Haldane, the Bank's executive director for financial stability warned that the relationship between the state and banks represents a "doom loop" which will keep inflicting crises on the public unless arrested.
Yep. Funny how over here in the United States the only people willing to speak truth are the bloggers and, oddly enough, The Huffington Post.
We cannot afford another disaster. Each of the last three has been exponentially more expensive, with this last go-around being a $12 trillion outrage.
The next one will literally destroy our government and economy and unless we act now to prevent it from happening we will suffer this outcome.
Tim Geithner was involved in this mess through its construction and still is, as he has not made a public issue of the regulatory arbitrage and extortion - indeed, he was one of it's chief architects when at the NY Fed.
HE MUST BE FIRED.
Be aware Congress: The People aren't as stupid as you think. There is a breaking point beyond which the people of this or any other nation simply will not tolerate the blatant extortion and theft of any hope for a better future for themselves and their children.
A 10.2% "official" unemployment rate and a real rate of unemployment approaching 20%, or one in five working-age Americans, after all the broken promises of "easier credit" (when the truth is 29.9% interest rates while the banks can borrow at ZERO) along with "better times" out of both Congress and Obama might just be it - especially if you let this sort of outrageous conduct by the banksters and their lobbying arms continue.
Re: Denninger vs Stupid Americans « Reply #1 on Nov 7, 2009, 3:01pm »
Agreed, Americans have got to be the dumbest people in history. The majority only seem to be interseted in sex, fantasy football, alcohol, and work. Even when you tell them about all the stupid and evil thing being done in their name, they could care less.
Re: Denninger vs Stupid Americans « Reply #2 on Nov 7, 2009, 7:29pm »
If you want to keep cattle manageable you keep them calm and fed. To keep keep the serfs from slaughtering and eating the nobility you keep them ignorant and entertained(like the Romans did and the Federal government has done for decades).
And it works until it the funds for bread and circuses end or reality hits the serfs on their head hard enough to wake them out of their stupor.
Right now it looks like reality is slowly impinging upon the unreality bubble put around many Americans by Wall Street and the political parties in the form of unemployment.
And its something that neither Washington political elite or Wall Street can deal with as all they can think about is how to screw the middle-class into oblivion as they enrich themselves.
I figure when the unemployment rate hits around 25-30% or more there is going to be serious social unrest. All it will take is a few firebrands to kick it off(and inspiring others) by say shooting a bunch of Goldman-Sachs workers or torching some rich peoples palaces in Telluride or the Hamptons. Though I wouldn't want to be driving around in a Mercedes or Lexus when the shit goes down since both are obvious signs of wealth.
I figure when the unemployment rate hits around 25-30% or more there is going to be serious social unrest. All it will take is a few firebrands to kick it off(and inspiring others) by say shooting a bunch of Goldman-Sachs workers or torching some rich peoples palaces in Telluride or the Hamptons. Though I wouldn't want to be driving around in a Mercedes or Lexus when the shit goes down since both are obvious signs of wealth.
Its not if its just a matter of when.
I think you're right.
There are already 98 million working-age Americans who are not working at present, which is roughly 42% of the working-population. Classifying only 15.7 million of them as "unemployed" is a largely a subjective determination.
Obama: "I wish I could vote [for] CAFTA....Amer. workers are afraid of globalization" "We need more trade....We shouldn't try to stop [globalization]""I don't accept...that illegal immigration suppresses wages";US Employment / Real Weekly Wages
Re: Denninger vs Stupid Americans « Reply #4 on Nov 8, 2009, 7:27am »
The public option lives.
Obama and Congress still have enough consolidated power and will power to pass it.
The public has not given up on Obama and Congress just quite yet.
I maintain that Denninger is wrong and the public is ignorant, unconcerned, passive when it comes to reacting to getting screwed by the banking class and financial institutions pulling the taxpayers' fortunes out of their pockets by manipulating government.
"42% who are not working at present" has not produced the correct reaction that would be approperiate to this Crisis.
I expect more banking class taking of taxpayers' fortunes until the public reacts to more extreme economic events. I am predicting that will not happen sufficiently until Obama and Congress lose power in 2012.
Re: Denninger vs Stupid Americans « Reply #5 on Nov 8, 2009, 8:44am »
The public has not given up on Obama and Congress just quite yet.
They have if you've seen the poll numbers which puts Congress's approval ratings lower than Cheney's.
Obama still has so-so ratings thanks to a MSM that portrays him as God and no some brain damaged clown who can barely string together a sentence without a teleprompter.
Still expect their ratings to go ever more lower as unemployment continues to rise and with no end in sight. I'd say by the 2010 mid-terms most Democrats are going to be looking for a hole to crawl into.
And Americans aren't passive, its just that Congress no longer listens to the people. When people were calling in against TARP did Congress listen? No. When people protested and called in against Obama Health care did Congress listen? No.
And this has put Americans into a pickle, as now they have only a few legal options left. 1)Try to vote them out, very hard as most districts(80%) are heavily gerrymandered which guarantees most Congressmen have lifetime seats(think Murtha, Rangel, Franks, etc). Luckily its not that bad for Senate or Governor. But the House is beyond hope/reform.
2) Targeted protests on select Congressmen and Senators. I'm not talking stern letters and phone calls but harassing the hell(think TMZ on steroids, hiring PI's to get dirt on them) out of the most corrupt senators and congressmen in office. Make their personal lives hell.
3) Put up alternative candidates against select politicians. Drawbacks: its expensive and takes a competent organization to make it work. Something that 3rd parties don't have.
Beyond these actions you enter in to realm of mass tax protests, actions against the banks and Wall Street such as by taking all money out of the banks and putting 401k assets into cash, stop paying credit cards(this one will be very common as unemployment goes ever higher).
Violence will come last as the social safety net and the dollar collapse. Which BTW has been the only thing stopping violence so far.
Joined: Feb 2006 Gender: Male Posts: 1,117 Karma: 99
Re: Denninger vs Stupid Americans « Reply #6 on Nov 9, 2009, 9:22pm »
NPR interviewed Mr. Plouf, who worked with Axelrod on the campaign, and is pushing his book. He said Obama was the best speechwriter on their staff, and wrote most of his own stuff. He stutters and stammers when interviewed because he is has to be very careful, as he knows how his answers will be analyzed and any gaffs magnified. There are complete books of Bushims, btw.
We just need to get him a quick course in economics, and to dump that whole rotten bunch, and let Volker pick the replacements. It may happen, I hope.
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