Open Thread: Financial Situation Following Fannie and Freddie Takeovers
September 8th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
Posted in Economy | Top Of Page
cryptogon.com
news – analysis – conspiracies
This opening graf at the NTY just fucked with my mind:
“The Bush administration seized control of the nation’s two largest mortgage finance companies on Sunday, seeking to shrink drastically their outsize influence on Wall Street and on Capitol Hill while at the same time counting on them to pull the nation out of its worst housing crisis in decades.”
I mean, wow!
This is a false-flag operation to re-capitalize an insolvent banking system allowing them to offload the L-3 garbage, and dump the shadow-inventory. The October surprise will be more negative earnings.
Paulson isn’t really trying to stop anything, just slow it down. He knows where this is all headed.
What would Cramer do?
Increasingly it’s becoming impossible to play the market for anyone without government connections. Fundamentals don’t matter when you can get a bail out and stocks move up on the news that the whole system is bankrupt. An effective SEC would have all the major players in jail (as an effective Dept. of Justice would have most politicians in jail as well). The time is growing nearer when pitchforks, tar, and feathers will do their job for them. The whole system is now based on keeping the masses If I were Paulson I’d be building a moat around my house, not trusting the fences I’d all ready installed.
Which brings me to this question, are these people really happy living in their gated opulence? Can’t they see that it’s better for their own existence to at least share a minimum of the wealth? Or are they really happy to exist in their ever shrinking islands of prosperity surrounded by shanty towns of folks plotting to murder and steal from them? I guess I know the answer, it just seams to go against my basic understand of human nature.
keeping the masses ignorant. Sorry need to edit better!
I quote Ilargi:
“Yes, that’s right, as soon as the books were approved, F&F were allowed to lower their reserve requirements even more. They were already ridiculously low, these “OFHEO-directed capital requirements”, with a few billion dollars supporting $5-6 trillion in loans, and perhaps as much as $9 trillion in total debt. Ridiculously low, but not yet low enough for lenders to squeeze some more dupes.
That was four months ago. Now we find out that the Treasury and Morgan Stanley, upon seeing the same books just four months later, concludes that they are not at all in order, and there no “accurate financial statements”. In fact, they are so full of lies and deceit, all legal provided you call it “creative accounting”, that Fannie and Freddie need to be nationalized.
And who will be in charge, as regulator, now for the newly re-named FHFA, which is nothing but the OFHEO in a new dress? Well, James Lockhart of course. The same man who approved those books a few months ago and allowed (make that caused) the debt at F&F to rise even further…..
That’s what I call a confidence booster. If you’re into massive fraud, that is.”
http://theautomaticearth.blogspot.com/2008/09/debt-rattle-september-7-2008-to.html
An especially excellent site.
Here’s a non-rhetorical question: if you were Paulson or Bernanke or someone in a position to Change Things in the financial world, what would you have done instead?
This bailout/nationalization/whatever you want to call it is just one part of a long, long-running game; but even if there was an honest, independent, rational and responsible person who was in a position to make policy decisions, what could they have done differently on Friday or Saturday or Sunday?
I’m curious. Does the US gov’t really have many other options at this point?
what could they have done differently on Friday or Saturday or Sunday?
How about seizing the assets of the INDIVIDUAL EXECUTIVES of the firms who are responsible for this mess; the people who generated the fraudulent loans in the first place. The money isn’t gone. It has just been swindled into a few private accounts.
Holding people accountable? How unamerican!
Last night Sydney bought gold up and gave me a nice 28% profit at 814.50 or so, I just got back in at 812 and am watching New York clear the fractal. It’s the least one can do.
What began as a straightfoward rally quickly turned into a volatile house of mirrors. Watching it, I noticed the black (bullish) bars moved at relatively even increments, like many players were going long and building momentum, but the grey (bearish) bars erupted at once, like a single party was dumping hundreds of thousands of ounces at once. It has a very political feel, like riot police spraying high-pressure water on a crowd of protesters, but maybe I’m just reading into it too much.
(9/8/08, 8:46 am Eastern Time) The SP 500 is up over 3% in premarket trading. The party goes on! For the top 0.1%, that is. While the rest of us foot the bill. Good thing Obama’s going to change all that. 😉
The price action of the last few days perfectly illustrates 3 things:
1) never, ever hold overnight. stops aren’t so swell if the exchange is gone. (see: london)
2) the only safe play in volatile conditions is daytrading. swing plays are exceptionally difficult when major players are allowed to turn the markets into a giant confidence game, rearangeable by the capos at will … the consiglieri will not be investigating, I assure you.
3) the last act of any corrupt government is to loot the treasury.
@ kevin,
“How about seizing the assets of the INDIVIDUAL EXECUTIVES of the firms who are responsible for this mess … ”
I agree ! Let’s put all that nice surveillance and anti-terrorist funding intrusive spying to a good use, for a change. I feel pretty darn terrorized by the fed gov saying I am responsible for this, and should help pay for it. WRONG ! I play the futures market lotto as all should have to: fairly. If I lose, I doubt very highly anyone will bail me out. I have traded for 19 years now … and all I have ever asked of my “government” was to leave me alone.
I think that those responsible should be have their heads figuratively put on pig poles, as a lesson to the next 5 generations … that some arrogance has too high a price.
cybele
How about seizing the assets of the INDIVIDUAL EXECUTIVES of the firms who are responsible for this mess; the people who generated the fraudulent loans in the first place. The money isn’t gone. It has just been swindled into a few private accounts.
And idea I heartily endorse, although I suspect a great deal of these funds are in Swiss bank accounts that no authority in the world can touch. Moments such as this one really make one realize how much crime Swiss banking has enabled.