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I've held my peace regarding this proposed "bail out" until now opting to just read other peoples posts...I'm now starting to see a slant tipping in favor of it so I must step in...It would appear that the propaganda machine has taken it's toll and a lot of people are believing the hype. Now a few days ago I made a statement hinting at my disapproval of this plan...well actually I believe my exact words were that it's "the biggest cluster fck in American history"...I also said I would back up why I said that... which I plan to do. For starters to even propose such a thing as this bail out shows an unbelievable degree of hubris that is a microcosm of why this country is in this situation to begin with. This is the definition of "throwing good money after bad" and it doesn't even address the bigger overall problems with the economy...it's as if someone gave an aspirin to someone who just had a traumatic car crash...no actually it's more like giving them a PLACEBO just to make them feel good PSYCHOLOGICALLY in order to keep them from panicking so things don't get worse. On top of that this placebo is EXPENSIVE and it's cost actually rivals the amount it would take to give the patient REAL care and treatment for their injuries.

Let me break this down...When Henry Paulson and Ben Bernanke first concocted this scheme and took it to members of congress...they claimed it was because the credit markets were starting to freeze up and that this put the entire economy at risk because businesses would not be able to borrow to make payrolls, be able to pay overhead expenses, etc. They painted a very grim picture to law makers and with the backdrop of the stock market tanking they felt they had all the ammo they needed to get the plan they wanted....which would have for all intents and purposes made Henry Paulson the Tzar of the bail out proceedings... with little or no oversight. Now it looks as though they may have reached an agreement for the plan and it does not give Paulson all of what he initially wanted...at least not all at once. The new plan makes $250 BILLION available immediately...$100 billion more if the president certified it was necessary, and the last $350 billion with a separate certification as opposed to the entire $700 BILLION upfront.

There are also provisions in the plan which state... the only companies that would be eligible for bail out money are those who deny executives "golden parachutes" As well as trying to sweeten it a little by adding that the government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in recipients 'future profits'. However, all this amounts to is just adding a little vaseline to the initial plan that Paulson wanted to stick the tax payer with. In fact to even be talking about tax payer relief based on a plan like this is oxymoronic...When you consider the fact that this could cost every American household around $11,000 in added tax burden the idea that somehow these "assets" that tax payers are being stuck with... which by the way NO financial institution wants...will ever turn a profit to offset this is laughable. These "illiquid assets" as Paulson and Bernanke so affectionately calls them is nothing more than financial TOXIC WASTE...if there is any chance of there being value then why can't the financial institutions who bought them in the first plan keep them on their books until the value goes back up?... why dump it on the American public?

Wallstreet was built on leverage... meaning taking assets and borrowing against these assets for MANY times what they were actually worth...the fact that they can no longer leverage these assets lets me know that they are WORTHLESS...with no chance that any value will ever come of them. So lets play devils advocate for a second... and lets say that Paulson and Bernanke are correct that the economy will go into a deep recession or depression if this plan doesn't go through. The answer is THE ECONOMY IS SUPPOSED TO people seem to forget that recessions are part of the economic cycle and they are NECESSARY...you cannot have perpetual exponential growth....an economy needs to be able to cool off and weed out those WEAK and POORLY managed companies that could not make it and that DESERVE to be removed from the market place...the financial sector is no exception. Of course this will entail a LOT of pain but it's necessary...if you CHEAT (which is what this bailout is doing) and don't allow things to happen naturally then you are only setting yourself up for an even bigger DISASTER.

The truth of the matter for the U.S. economy though is that it's really a damned if you do damned if you don't scenerio...notwithstanding my above statement about the economic cycle which under normal circumstances is true...this economy is not in a normal state. The industrial and manufacturing base is hollowing out, it's running ENORMOUS trade and budget deficits and it's consumer base (which makes up 70% of economic activity and growth) is stretched to the limit. This bail out does absolutely NOTHING to address this... which is why it will FAIL miserably and only make the U.S. weaker as a result. Although expect to see temporary euphoria (like a drug high) and a bump in the stock market...but this will only be a 'dead cat bounce' and once everything works it's way through the system it will go down again.

So the question has to be then doesn't Paulson and Bernanke know all this?...sure they do...then why are they pushing so hard for a plan that will only provide temporary relief instead of FUNDAMENTAL reform to stave off a CATASTROPHE that will only make things worse?

Well I've been watching this for quite some time and in my next post I'm going to shed some light on what could be the real reason Paulson and Bernanke are pushing so hard for this plan...and why the mainstream media is not talking about it.
quote:



from the article link:


"So without further ado, here are the top 5 reasons (in no order) why every single member of Congress - Democrat and Republican - should vote this sucker down. Please feel free to copy and paste this post into an email to your congressperson. They are deciding right now - let them hear your voice."


I'm gonna do that.
So congress is still trying to push this bail out i.e, "rescue plan" even though it was resoundly rejected by their constituents...well at least those representing the American public and not the ones representing Wallstreet that is. I'm not suggesting that they should do nothing however it's quite interesting to see them embracing such a TRICKLE DOWN method of dealing with this. One would think that if your aim is to "protect mainstreet" why do it in such a round about way?...instead of clearing the books of greedy corporations in order to unfreeze credit markets how about dealing with it at the roots? The reason there is a credit freeze is because banks don't trust each other since nobody knows the full scale of their exposure to those toxic assets. So instead of cutting a check to Paulson and his cronies why not just have the government using its "full faith and credit worthiness" act as a defacto "co-signer" on the lending that one bank does to another? This would effectively tell bank A that it's ok to lend to bank B because if bank B defaults THEN the government would step in and cover bank A's losses. That way the government does not have to come up with the money UPFRONT (which actually means borrowing it at interest) unlike the Paulson plan which wants to basically make him the MIDDLEMAN holding the funds to allocate them as he sees fit.

Another thing that can be done is to make the funds DIRECTLY available to the public in the form of low interest loans and grants...if the idea is to unfreeze credit markets then can you think of a better way to do this than making $700 BILLION dollars directly available to the public?....Banks would be tripping over themselves to get access to these public funds...for example car dealerships would want people to bring in some of those funds for down payments on cars so of course finance companies would make financing available if someone has a nice down payment this would unfreeze markets. I only point out these few examples to illustrate the fact that if they are creative enough MANY other things can be done that would yield a better result than this proposed bail out. Not that it will solve all of America's problems because those are far to far-gone...however if the idea is only to deal with this most immediate crisis and just let the party keep going a little while longer then there are better ways to do it.

Another thing I find interesting is that both Obama and Mccain are supporting this bail out even though if passed it would basically cripple both of their programs to cut taxes AND fund their respective health care plans. Obama is even supporting a caveat that would increase the FDIC protection limit from 100k to 250k which makes NO sense. All that would do is limit the protection for a higher number of people with smaller amounts.... if the fund ever has to start cutting bigger checks in an emergency. Because as I told NS the FDIC only has about $45 billion available it's a lot but it's not an infinite amount....it only represents 1 penny for every dollar that it's supposed to protect...so instead of raising the limit for protected deposits how about raising the AMOUNT that's in the fund itself?

Anyway, as I alluded to in my last post if this bail out is such a bad idea why is Paulson so adamant about it? like I said I've been following this for some years now...and years ago I came across some information that seemed crazy to me initially but now it's all starting to make sense. I'm going to post an article I read years ago and a link to a site by some European "conspiracy nuts" however the more this thing plays out the more these "nuts" are making sense. They have been claiming for years that Paulson is responsible for the theft of hundreds of billions of dollars that he in conjunction with the Bush/Clinton administration commandeered from Leo Wanta. Who was a senior US intelligence operative under the Reagan administration that was instrumental in economially bringing down the former soviet union by destabilizing the Soviet currency (the ruble) at the end of the Cold War... this also generated Trillions of dollars in the process for the U.S.. After that he was made legal guardian of the funds by Reagan with the intention of the funds being released to the American public.

However, instead of doing this the first Bush administration and then the Clinton administration seized the funds and had Wanta locked up on trumpted up charges. So now this whole scheme is threatened to be exposed and that's why Paulson and the Bush administration is now scrambling to try to cover it's tracks....Using this current crisis as a smoke screen and scare tactic to make off with enough funds to plug the holes.

When I first started reading up on this it was for amusement...but as this thing is starting to unfold things are looking pretty ironic to say the least...in fact below is an excerpt from one of the reports and if you notice one of the amounts they said that traced which was stolen happens to be $750 BILLION..which just so happens to be the 'arbitrary' number that Paulson claims he needs for his plan there just may be something more insidious going on than meets the eye...Judge for yourself....

15 Apr 2006 Report by Greg Szymanski:


The Patrick Fitzgerald investigation is spilling over across the pond to Switzerland, trying to trace the bank swindling and dirty dealings of Clinton-Bush bagman and Mossad agent, Marc Rich.

Sources near Fitzgerald claim the crime-busting Chicago special prosecutor is delving into why Rich was tipped off and able to evade a 1993 arrest attempt, ordered by FBI director William Sessions.

Those watching the Plamegate investigation hope Fitzgerald is the 'real deal' and not just providing a neo con dog and pony show, but sources claim that the investigation is now meticulously looking into bank swindles by the Bush-Clinton mob, amounting to more than a trillion dollars, involving money earmarked for the U.S. Treasury.

And bank account records – tracing more than $750 billion of missing or stolen money – have been already provided as public record by Leo Wanta, the former U.S. Treasury agent assigned by Sessions to put the finger on Rich. (See accounts listed below).

In a telephone conversation Friday, Wanta said he still keeps the official 1993 Rich arrest warrant, as proof-positive the events took place as he reported.

However, in a strange turn of events, Wanta was jailed for his efforts, placed for 134 days in a Swiss dungeon, as Rich was allowed to slip free in a move, according to Wanta, leading to the theft of hundreds of billions – if not trillions – of U.S. Treasury funds by the Bush-Clinton mob.

After Wanta was framed and put in jail, reports linking Hillary Clinton to dipping into the Wanta-controlled accounts were recently verified by overseas investigators.

UK investigators claim that the First Lady travelled to Grenada, ordering a bank transfer from Bank Crozier Limite, Grand Anse P.O. Box 1005, St George's Grenada, West Indies.

Although the amount that Clinton pilfered overall is unknown, it is estimated that she may have writhdrawn approximately $250 milliion from a Leo Wanta-controlled account, an account to be transferred to the U.S. Treasury listed under Marvelous Investment Limited, bank account number A/C 374-250. [Information is available concerning other heists in which she may have been involved].

Wanta, released form a long jail term last October [CORRECTION BY CS: NOVEMBER], also said this week in a telephone conversation that he has provided new information to overseas investigators in an effort to uncover even more of the stolen money, as he is fast on the trail of the vast sum of money with the help of foreign investigators and sophisticated computer software.

"They are now messing with my computer, but so far we've successfully traced well over a trillion dollars and there is more to come, I'm sure", said Wanta, adding that the original source of the money came from a financial scheme he put together on behalf of President Ronald Reagan to destabilize the Soviet currency at the end of the Cold War, subsequently amassing a fortune amounting to more than 27.5 trillion dollars. [CS: This fund is now believed to be worth around $70 trillion or more].

"We did so well with what we did, Bush and Clinton wanted to copy our methods. When I didn't play all with them, they wanted me out of the way so they could get their hands on the money."

After the Cold War ended, the money was placed in overseas accounts, Wanta being appointed legal guardian of the fortune by President Reagan with the understanding it be returned to the American people to be used for schools, roads and even infrastructure improvements in Louisiana to bolster the inadequate levee system..

To the dismay of Wanta's detractors and skeptics, a 2003 federal court ruling, docket no. 02-1363-A, dated April 15, 2003, by Federal Judge Bruce Lee affirmed Wanta's position as legal trustor with the obligation to return a major portion of the money after taxes and trustor expenses back to the U.S. Treasury.

But when Bush senior and Clinton took over the reins of the White House, according to Wanta, things changed, as the vast sum of money was treated more like their own personal slush fund instead of property of the American people.


http://www.worldreports.org/news/8_leo_wanta_and_the_global_financial_showdown
Here is a interesting point:

http://video.google.com/videoplay?docid=7657610222796819392&vt=lf&hl=en

It really comes down to people beig really stupid to bid up the price of housing but considering the low population density of the United States why is housing so expensive. I think we are being played and not getting the right info to see the big picture but we are constantly bombarded with tons of trivial BS.

um
quote:
Originally posted by umbrarchist:
Here is a interesting point:

http://video.google.com/videoplay?docid=7657610222796819392&vt=lf&hl=en

It really comes down to people beig really stupid to bid up the price of housing but considering the low population density of the United States why is housing so expensive. I think we are being played and not getting the right info to see the big picture but we are constantly bombarded with tons of trivial BS.

um



Um, thanks for the link. interesting stuff
Fannie Mae forgives loan for woman who shot herself


(CNN) -- Fannie Mae said it will set aside the loan of a woman who shot herself as sheriff's deputies tried to evict her from her foreclosed home.

Addie Polk, 90, of Akron, Ohio, became a symbol of the nation's home mortgage crisis when she was hospitalized after shooting herself at least twice in the upper body Wednesday afternoon.

On Friday, Fannie Mae spokesman Brian Faith said the mortgage association had decided to halt action against Polk and sign the property "outright" to her.

"We're going to forgive whatever outstanding balance she had on the loan and give her the house," Faith said. "Given the circumstances, we think it's appropriate."

Residents of Akron have rallied behind Polk, who is being treated at Akron General Medical Center. She was listed in critical condition Friday afternoon, according to Akron City Council President Marco Sommerville.

U.S. Rep. Dennis Kucinich, D-Ohio, mentioned Polk on the House floor Friday during debate over the latest economic rescue proposal.

"This bill does nothing for the Addie Polks of the world," Kucinich said after telling her story. "This bill fails to address the fact that millions of homeowners are facing foreclosure, are facing the loss of their home. This bill will take care of Wall Street, and the market may go up for a few days, but democracy is going downhill."

Neighbor Robert Dillon, 62, used a ladder to enter a second-story bathroom window of Polk's home after he and the deputies heard loud noises inside, Dillon said.

"I was calling her name as I went in, and she wasn't responding," he said.

He found her lying on a bed, and he could see she was breathing. He also noticed a long-barreled handgun on the bed, but thought she just had it there for protection. He touched her on the shoulder.

"Then she kind of moved toward me a little and I saw that blood, and I said, 'Oh, no. Miss Polk musta done shot herself,' " Dillon said.

He hurried downstairs and let the deputies in. He said they told him they found Polk's car keys, pocketbook and life insurance policy laid out neatly where they could be found, suggesting that she intended to kill herself.

"There's a lot of people like Miss Polk right now. That's the sad thing about it," said Sommerville, who had met Polk before and rushed to the scene when contacted by police. "They might not be as old as her, some could be as old as her. This is just a major problem." VideoWatch Polk's neighbor describe what he saw »

In 2004, Polk took out a 30-year, 6.375 percent mortgage for $45,620 with a Countrywide Home Loan office in Cuyahoga Falls, Ohio. The same day, she also took out an $11,380 line of credit.

Over the next couple of years, Polk missed payments on the 101-year-old home that she and her late husband purchased in 1970. In 2007, Fannie Mae assumed the mortgage and later filed for foreclosure.

Deputies had tried to serve Polk's eviction notice more than 30 times before Wednesday's incident, Sommerville said. She never came to the door, but the notes the deputies left would always disappear, so they knew she was inside and ambulatory, he said.

The city is creating programs to help people keep their homes, Sommerville said. "But what do you do when there's just so many people out there and the economy is in the shape that it's in?"

Many businesses and individuals have called since Wednesday offering to help Polk, Sommerville said.

"We're going to do an evaluation to see what's best for her," he said. "If she's strong enough and can go home, I think we should work with her to where she goes back home. If not, we need to find another place for her to live where she won't have to worry about this ever again."

For his part, Dillon hopes his neighbor of 38 years can return to her home.

"She loves that house," he said. "I hope they can get her back in. That would make me feel better because I don't know what they're going to put in there once she leaves."

He said the neighborhood is declining because so many people have lost their homes.

"There's a lot of vacant houses around here. ... Now I'm going to have a house on my left and a house on my right, vacant," he said. "That don't make me feel good, because we were good neighbors, we trusted each other, and we looked out for each other.

"This neighborhood is shot, to me, from what it used to be," he added.

"When I moved here, if it were like it is now, I would have never moved here. But it was a nice neighborhood. ...

"I'll just tough it out. I'm too old to start thinking about buying another house."

Sommerville said that by the time people call for help with an impending foreclosure, it's usually too late.

"I'm glad it's not too late for Miss Polk, because she could have taken her life," Sommerville said. "Miss Polk will probably end up on her feet. But I'm not sure if anybody else will."

CNN's Jim Kavanagh, Brad Lendon and Mallory Simon contributed to this report.


Find this article at:
http://www.cnn.com/2008/US/10/03/eviction.suicide.attem...tml?iref=mpstoryview
Fear really does make for some strange bed fellows...This $700 billion $850 BILLION + bailout bill is the financial equivalent to IRAQ....Bush and his cronies done got ya'll again. It's amazing that if you go back to only about a week prior to when Paulson gave his dire warning about the need for his bailout that agreeing with Bush on anything was toxic.... and to be accused of backing Bush on anything was effectively a political pejorative. Yet democrats like Harry Reid, Nancy Pelosi and not to mention presidential candidates Obama and Mccain (who prior to this was loathed to agree with Bush on anything in order to distance himself from his failed policies) are all in lock step about this...that alone should give one pause.

As I predicted days before this bailout was approved you would initially see markets go up...but once everything worked it's way through the system it will go down again. This is why the stock market (not that it's a true barometer of the real economy or anything) dropped over 150 points Friday because the reality is that this bailout does nothing to strengthen true economic fundamentals. Similar to when no WMD's were discovered to justify the Iraq invasion and that Iraq was the wrong place to go in fighting the "war on terror" and that hundreds of billions were essentially wasted (except to enrich a select few). People will slowly realize that this whole bail out plan is not addressing the real economic problems plaguing this nation. Therefore they will increasingly start to question whether or not it was even a good idea...or if the money could've been used more effectively to deal with the REAL problem.... similar to the question if all the resources being dumped into Iraq would have been better spent in Afghanistan.

This however is all water under the bridge (a bridge to no where at that) since the deal is already done... and just like Iraq America is stuck with it's decision. There were many ulterior motives behind the invasion of Iraq and this bail out is no different in that regard...I wonder if people realize that a large percentage of the financial institutions that will be bailed out are not even American they are FOREIGN OWNED...This is because when wallstreet packaged up these "mortgage backed securities" and sold them off as "secure" a lot of the firms who invested in them were oversees institutions. This bail out is basically restitution for the fact that wallstreet SCAMMED these investors into thinking that the investments were secure which they were anything but. A lot of this is just smoke and mirrors to perpetrate the facade that America is secure to the same foreigners that it is dependent on borrowing from.

America doesn't even have the money that is being used for this bailout it will have to be borrowed (at interest) and the Fed will need to print more money (which will create inflationary pressure just as the economy is slowing) in order to pay for this. Ultimately the tax payer will have to foot the bill and is once again the pawn in this game of chess...however this latest move basically just gave more power to a few hands in order for them to get that checkmate they've been looking for.
Back in 2006, I tried to buy a brand new house. My agent drove me around to various new housing tracts. I wound up giving up because in every case, I believed the houses were heavily price inflated. I also got the sense that my agent was acting more like a ramona and was just along with me to get in on the greed fest prevalent throughout the industry. Now that the worm has turned, I have been proven right.
quote:
Originally posted by EbonyRose:
Fannie Mae forgives loan for woman who shot herself


{snip long article}

Find this article at:
http://www.cnn.com/2008/US/10/03/eviction.suicide.attem...tml?iref=mpstoryview


I'm sorry but this article is too one-sided. There making this woman out to be some put-upon, old lady saint. It doesn't even address what she was thinking when she signed those docs in the first place. What kind of income did she have that would justify basically handing her $70,000 at 86 years of age? Was she refinancing in 1994 to consolidate/payoff previous refinancings? It seems that the home would already have been paid off if it was purchased in 1970. Wouldn't a reverse mortgage been more appropriate for her age and situation?

I want more details. I want to see her loan docs. (Yeah, I know that's impossible, but still.)

I wouldn't call this woman a symbol of the mortgage crisis without getting more details. Something's fishy.
quote:
Originally posted by Prognosis:

Back in 2006, I tried to buy a brand new house. My agent drove me around to various new housing tracts. I wound up giving up because in every case, I believed the houses were heavily price inflated. I also got the sense that my agent was acting more like a ramona and was just along with me to get in on the greed fest prevalent throughout the industry. Now that the worm has turned, I have been proven right.



I had a similar experience. I was trying to find a townhome, but it seemed like the prices were outrageous as heck. i'm still a renter Frown which as it turns out, is probably for the best.
quote:
Originally posted by ATPWordPro:
quote:
Originally posted by EbonyRose:
Fannie Mae forgives loan for woman who shot herself


{snip long article}

Find this article at:
http://www.cnn.com/2008/US/10/03/eviction.suicide.attem...tml?iref=mpstoryview


I'm sorry but this article is too one-sided. There making this woman out to be some put-upon, old lady saint. It doesn't even address what she was thinking when she signed those docs in the first place. What kind of income did she have that would justify basically handing her $70,000 at 86 years of age? Was she refinancing in 1994 to consolidate/payoff previous refinancings? It seems that the home would already have been paid off if it was purchased in 1970. Wouldn't a reverse mortgage been more appropriate for her age and situation?

I want more details. I want to see her loan docs. (Yeah, I know that's impossible, but still.)

I wouldn't call this woman a symbol of the mortgage crisis without getting more details. Something's fishy.



seems like i keep seeing a lot of stories about elderly people getting caught up in re-financing on their homes. It seems strange because a person in their 80's...err...uhh...

ain't hardly gonna be paying off 30 years or even 15 years worth of debt.

the elderly are vulnerable it seems...and predators are...well...predatory.

does an 86 yr old even have the capacity to consent to something like this?

Where were the Elder Affairs agencies in these states? Shouldnl't they have known elderly people would be vulnerable to predatory lenders?
Hi NS:

Found more info on chron.com yesterday. {several grains of salt thrown over shoulder 1 }

This other story indicates that she started on this rollercoaster in 1997 with the first refi. So I'm wondering . . . how far back are we going to go when trying to determine if someone is a victim of the current mortgage crisis? Unfortunately, the story didn't give any information on her family situation or why she was getting the money. Some other posters are speculating medical/funeral expenses, which would account for the first refi. But what about the others?

As far as her being elderly, I don't think that can be a factor. (Hell, look at the ages of our congress people!) I can't assume that she didn't have the mental capacity to understand the transactions simply because of her age. If she qualified for the loan and it wasn't given to her, there could have been charges of discrimination. It seems you can't use age as a determining factor when underwriting a loan, same as gender and race. If you're over the age of majority and meet the criteria, you get the loan.

I was unaware of any such thing as Elder Affairs agencies. I'm going to take a look.
quote:
Originally posted by Prognosis:
Back in 2006, I tried to buy a brand new house. My agent drove me around to various new housing tracts. I wound up giving up because in every case, I believed the houses were heavily price inflated. I also got the sense that my agent was acting more like a ramona and was just along with me to get in on the greed fest prevalent throughout the industry. Now that the worm has turned, I have been proven right.


This is exactly how I feel. We need to be able to walk away.

My mortgage broker tried to go there with me as well. I already knew what house I wanted and what I wanted to pay. They kept pressing me about how much more I would qualify for. Um no thanks.
Ok...so let me get this straight Bush and his cronies create the sense of urgency to congress that the bail out must be approved immediately and afterward he signed it himself into law with record speed before hightailing it to Texas. Yet he says today that the actual IMPLEMENTATION of this "urgent" bail out can't be rushed and needs to take time. Meanwhile everything that this bailout was suppossed to avert seems to be happening... stock markets are crashing and credit markets on the international and local level are freezing up. California (the richest state in the union) for example is in a state of emergency on it's own... so much so that Arnold "The Governator" Schwarzenegger is on his hands and knees begging for $7 billion just to keep things functioning. It seems quite counter-intuitive that congress would allow a bill to pass such as this and then stuff it with $150 billion worth of pork projects when all these states are in such bad shape.

What's more who do they select to oversee the allocation of the $700 billion?...Neel Kashkari who is a former Goldman Sachs investment banker...in defense of this decision Treasury Secretary Henry Paulson (a Goldman alum himself) says that he chose him because he wanted the best people working on this....Oh really?.. if his old buddies from Goldman (who incidently stand to gain the most from this deal) are so good then why didn't they avoid getting in all this trouble to even need a bail out in the first place?

This thing just keeps getting better by the day.....
quote:

What's more who do they select to oversee the allocation of the $700 billion?...Neel Kashkari who is a former Goldman Sachs investment banker...in defense of this decision Treasury Secretary Henry Paulson (a Goldman alum himself) says that he chose him because he wanted the best people working on this....Oh really?.. if his old buddies from Goldman (who incidently stand to gain the most from this deal) are so good then why didn't they avoid getting in all this trouble to even need a bail out in the first place?

This thing just keeps getting better by the day.....


Actually Goldman was the only firm who avoided this mess recognizing when everyone else didn't that mortgage backed structured investment vehicles were a bad thing. In summer of 2007 they shorted these sivs, that was contrary to what nearly everyone else was doing. At the onset of this crisis many indignant outsiders looked at other financial institutions and asked why weren't you guys that smart? Of course that attitude no longer supports a "everything wall street is bad" attitude so it is conveniently forgotten.

Doing this by pricing, buying, and hopefully selling these crappy sivs is going to be an extremely complex thing, who would you suggest he recruit to do it?
Last edited {1}
quote:
Originally posted by zone:
quote:

What's more who do they select to oversee the allocation of the $700 billion?...Neel Kashkari who is a former Goldman Sachs investment banker...in defense of this decision Treasury Secretary Henry Paulson (a Goldman alum himself) says that he chose him because he wanted the best people working on this....Oh really?.. if his old buddies from Goldman (who incidently stand to gain the most from this deal) are so good then why didn't they avoid getting in all this trouble to even need a bail out in the first place?

This thing just keeps getting better by the day.....


Actually Goldman was the only firm who avoided this mess recognizing when everyone else didn't that mortgage backed structured investment vehicles were a bad thing. In summer of 2007 they shorted these sivs, that was contrary to what nearly everyone else was doing. At the onset of this crisis many indignant outsiders looked at other financial institutions and asked why weren't you guys that smart? Of course that attitude no longer supports a "everything wall street is bad" attitude so it is conveniently forgotten.

Buying this pricing, buying, and hopefully selling these crappy sivs is going to be an extremely complex thing, who would you suggest he recruit to do it?



someone who doesn't stand to profit from what is tantamount to the restructuring of the american financial system...

Even Joe Sixpack understands that those who stand to profit from deals shouldn't be the ones arranging them, what with ethics, and the appearance of impropriety and all...

Goldman Sachs

The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS), is a large global bank holding company that engages in investment banking, securities and investment management. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street.[1] Goldman Sachs has offices in all major world financial centers. The firm acts as a financial advisor and money manager for corporations, governments, and wealthy families around the world. Goldman offers its clients mergers & acquisitions advice, underwriting services, asset management, and engages in proprietary trading, and private equity deals. It is a primary dealer in the U.S. Treasury securities market.
quote:
Originally posted by negrospiritual:

someone who doesn't stand to profit from what is tantamount to the restructuring of the american financial system...

Even Joe Sixpack understands that those who stand to profit from deals shouldn't be the ones arranging them, what with ethics, and the appearance of impropriety and all...


That would be ideal but it appears to me highly impractical. By your standard:

Every financial institution in America stands to benefit, so no one from there can be tapped.

Most from academia have pension plans that likely own these securities so they are out.

Don't even get me started about congress doing it.

Almost anyone with the experience necessary to do this is likely to have some form of personal investments, at a minimum an IRA, 401K or own a home. All of these things could be construed to be a way to profit from the outcome.

As I said this is going to be very complex stuff many astute financial experts admit a lack of understanding when it comes to these complex derivatives.

Again I ask who would you have do this?
Last edited {1}
quote:
Originally posted by zone:
quote:
Originally posted by negrospiritual:

someone who doesn't stand to profit from what is tantamount to the restructuring of the american financial system...

Even Joe Sixpack understands that those who stand to profit from deals shouldn't be the ones arranging them, what with ethics, and the appearance of impropriety and all...


That would be ideal but it appears to me highly impractical. By your standard:

Every financial institution in America stands to benefit, so no one from there can be tapped.

Most from academia have pension plans that likely own these securities so they are out.

Don't even get me started about congress doing it.

Almost anyone with the experience necessary to do this is likely to have some form of personal investments, at a minimum an IRA, 401K or own a home. All of these things could be construed to be a way to profit from the outcome.

As I said this is going to be very complex stuff many astute financial experts admit a lack of understanding when it comes to these complex derivatives.

Again I ask who would you have do this?



You haven't negated any of the ethical considerations by repeating your opinion on the complexity of the situation, nor have you given adequate justification why Goldman Sachs personnel EXCLUSIVELY must the ones to resolve america's economic woes. The attempt to equate an academic with possible 401K ties with a Goldman Sachs executive who rec'd millions from the very same problematic investments which have set off a global crisis is laughable.

Your premise is irrational, and having goldman sachs executives "fix" the country's financial system, AFTER they've manufactured a panic remains an ethical dilemma.

Can you offer a valid rationale for tapping the wolf to repair the henhouse?
I agree that Operators from GS and the other investments houses would be the best people to value the products seeing as they are the ones that invented them. However, there should be strong non-conflict of interest conditions, e.g., divest all interest in the instruments, accept the position and get out of the industry for a period of years.
quote:
Originally posted by zone:
Actually Goldman was the only firm who avoided this mess recognizing when everyone else didn't that mortgage backed structured investment vehicles were a bad thing. In summer of 2007 they shorted these sivs, that was contrary to what nearly everyone else was doing. At the onset of this crisis many indignant outsiders looked at other financial institutions and asked why weren't you guys that smart? Of course that attitude no longer supports a "everything wall street is bad" attitude so it is conveniently forgotten.

Doing this by pricing, buying, and hopefully selling these crappy sivs is going to be an extremely complex thing, who would you suggest he recruit to do it?


Goldman "avoided the mess" you say?....GET REAL....Goldman just like every other wallstreet firm that peddled these toxic assets was a big PART of the mess. Just because they realized the folly of their actions at the 11th hour and managed to short the same derivative products that they were pushing doesn't make them boy scouts. It certainly doesn't give them the moral or ethical high ground either...nor should it give them the image that they were any "smarter" than other firms like Merrill or Lehman...they were just better connected.

In fact Goldman did not avoid this mess smelling like a rose either...and if you think otherwise apparently someone has been spiking your Kool-aid... Most independent observers believe that Goldman is lieing about it's REAL losses and that it's cooking the books...here is a quote from one...

"Common sense tells me that a lot of their losses were real and a lot of their gains were paper," says Charles Peabody, head of research at Portales Partners in New York.
"The opaqueness of Goldman's balance sheet makes us immediately question how they made money in the [third] quarter."


In addition Reuters reported last October that at first Goldman said that it's loses exposure to the subprime market was only 3.8 percent as of that May...then by August they upped it to 4.5 percent...Now they are saying it could be 7 percent...while even the now bought out Merrill Lynch only had exposure of 2.5 percent...It would appear that Goldman actually took the most risk and does stand to gain from any bailout.

This whole thing is chock full of secrecy, contradictions and conflicts of interest...now below I'm going to supply the articles and you can read it for yourself....perhaps YOU will continue to believe the garbage they're spewing however I will not..... all this fuzzy math just isn't adding up.


NEW YORK (Reuters) - Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz) has raised the estimated percentage of credit losses on its mortgage-backed securities portfolio, the U.S. investment bank disclosed on Wednesday.

Goldman's anticipates credit losses of 4.5 percent on $2.92 billion in mortgage-backed securities as of August, the company said in a quarterly filing with U.S. regulators. Its previous anticipated credit loss estimate was 3.8 percent on $3.5 billion in mortgage-backed securities as of May.
Meanwhile, the value of the New York-based investment bank's stake in mortgage-backed securities and pools of loans, or collateralized-debt obligations, has declined 35 percent to $4.77 billion from $7.3 billion since May. Goldman Sachs and other Wall Street banks have had to write down the value of these assets amid a global credit squeeze.
Goldman Sachs produced stellar profits in the third quarter, showing a 79 percent gain, while rivals such as Bear Stearns Cos Inc BSC.N and Merrill Lynch & Co Inc (MER.N: Quote, Profile, Research, Stock Buzz) stumbled from poor risk management and wrong-way bets on securities tied to mortgages given to people with weak credit. Merrill said last week it expects to lose money when it reports third-quarter results next week.
As defaults on U.S. mortgages continue to escalate, pensions, hedge funds and insurance companies are no longer keen to buy securities backed by homeowner loan payments.

Goldman Sachs, for example, packaged and sold, or securitized, only $23 billion in residential mortgages to investors during the nine months ended in August. That is down from $55.20 billion in the year-earlier period, the investment bank said in its quarterly filing.
Goldman Sachs also said the value of Level 3 assets, whose worth is largely pegged to management assumptions, stands at $72 billion, or 7 percent of the investment bank's total assets. The assets, which include corporate debt and subprime mortgages, are seen as risky because they trade infrequently, preventing companies from gathering reliable market prices.
In the second quarter, Goldman Sachs held $54.1 billion in Level 3 assets.
(Reporting by Tim McLaughlin)


http://www.reuters.com/article/bankingFinancial/idUSN1028913420071011

November 12, 2007 11:14 AM EST
According to reports from Bloomberg, Goldman Sachs (NYSE: GS) held a larger percentage of hard-to-value 'Level 3' assets at the end of Q3 than embattled rivals Citigroup (NYSE: C) and Merrill Lynch (NYSE: MER)

Goldman Sachs' Level 3 assets accounted for 6.9% of the company's $1.05 trillion in assets, while Citigroup showed Level 3 assets of 5.57% and Merrill showed 2.5%.

Goldman has repeatedly denied rumors of large suprime writedowns, as others banks have bombarded investors with news of new multi-billion dollar writedowns.

Goldman showed $72 billion in Level 3 assets as of August 2007, of which Goldman bear economic exposure of $51 billion. Of the Level 3 assets, $41 billion is classified as Corporate and other debt obligations, which Goldman said includes non-prime residential mortgage whole loans and mortgage-backed securities of $1.82 billion and funded leveraged loans arising from capital market transactions of $6.80 billion.

The 33% increase in Goldman's Level 3 assets was due in large part to the freezing up of the LBO market, which left firms like Goldman holding the loans.

Under new FAS 157 rules, firm's like Goldman are required to disclose a breakdown of their asset valuations. Level 1 Assets are unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Assets are quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; Level 3 assets are prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.


http://www.streetinsider.com/Corporate+News/Goldman+Sac...ts+Grow/3111791.html
quote:
Originally posted by LieDecrypter:

Goldman "avoided the mess" you say?....GET REAL....Goldman just like every other wallstreet firm that peddled these toxic assets was a big PART of the mess. Just because they realized the folly of their actions at the 11th hour and managed to short the same derivative products that they were pushing doesn't make them boy scouts. It certainly doesn't give them the moral or ethical high ground either...nor should it give them the image that they were any "smarter" than other firms like Merrill or Lehman...they were just better connected.


I did not imply that GS didn't or doesn't sell mortgage backed securities, of course they did and likely will continue to do so into the future. Mortgages have been packaged and sold into a secondary market since fannie mae was established in 1938, it's how our mortgage system funds itself. I am sure GS had numerous dealings, buying and selling theses defaulting derivatives. If you want to say they are better connected rather than better at investing I won't split hairs with you over it. The fact remains that they were the only major firm to take a short position in these things and made over 4 billion doing so. I see how well read you are and so I deduce you know that many of the people who think ill of GS now held them up as examples of prudent investing in 2007 when they made that trade.

quote:
Originally posted by LieDecrypter:

In fact Goldman did not avoid this mess smelling like a rose either...and if you think otherwise apparently someone has been spiking your Kool-aid... Most independent observers believe that Goldman is lieing about it's REAL losses and that it's cooking the books...here is a quote from one...

"Common sense tells me that a lot of their losses were real and a lot of their gains were paper," says Charles Peabody, head of research at Portales Partners in New York.
"The opaqueness of Goldman's balance sheet makes us immediately question how they made money in the [third] quarter."


In addition Reuters reported last October that at first Goldman said that it's loses exposure to the subprime market was only 3.8 percent as of that May...then by August they upped it to 4.5 percent...Now they are saying it could be 7 percent...while even the now bought out Merrill Lynch only had exposure of 2.5 percent...It would appear that Goldman actually took the most risk and does stand to gain from any bailout.

This whole thing is chock full of secrecy, contradictions and conflicts of interest...now below I'm going to supply the articles and you can read it for yourself....perhaps YOU


Goldman no doubt has sub prime exposure. Drawing from the evidence you provided me with I see GS has 1.82 billion in mortgage backed sub prime assets:
which Goldman said includes non-prime residential mortgage whole loans and mortgage-backed securities of $1.82 billion

I see their level 3 assets growing but not all of those assets are bad sub prime loans. The numbers you are throwing around are nearly a year old. I remember 2007 qtr 2 with all the speculation that GS was hiding sub prime exposure I traded GS during that period. Each quarter the GS bears would say here comes the bad news, yet it never came. GS has shown a profit for six quarters since Charles Peabody and others started to feel they were hiding bad stuff on the balance sheet. Do you really believe they could hold out that long? Come on, Merrill has had huge losses for the last 4 quarters in a row.

If you want to say hey I just don't trust these guys because you fear nepotism will taint them ok I can understand that. To say you don't trust them because GS is in dire need of being bailed out itself, I think your wrong and apparently so does Warren Buffet.

Before we got side tracked debating the solvency of Goldman Sachs I asked you whom would you like to see in that position ahead of Neel Kashkari. I'd like to know your answer, not so I can instantly disagree, but because you seem to have a strong understanding of the markets.
quote:
Originally posted by negrospiritual:

You haven't negated any of the ethical considerations by repeating your opinion on the complexity of the situation



I am not addressing the ethical considerations because I don't think they can be answered. I am just as bothered by this as you but it would seem to me all qualified candidates for the job come from the same tainted waters.

quote:
Originally posted by negrospiritual:

, nor have you given adequate justification why Goldman Sachs personnel EXCLUSIVELY must the ones to resolve america's economic woes


I don't think they have to be exclusively from Goldman, but I don't think that should automatically disqualify them either.

quote:
Originally posted by negrospiritual:

The attempt to equate an academic with possible 401K ties with a Goldman Sachs executive who rec'd millions from the very same problematic investments which have set off a global crisis is laughable.


Ok not exactly apples for apples I admit. However, even though the dollar amounts are different the temptation to be biased toward one's own best interests looks equal to me.

quote:
Originally posted by negrospiritual:

Your premise is irrational, and having goldman sachs executives "fix" the country's financial system, AFTER they've manufactured a panic remains an ethical dilemma.



Look I don't think Goldman itself "manufactured a panic" nor do I think they played as big a role in causing this mess as you may. I do concede the appearance of culpability, and recognize the ethical dilemma it raises.

quote:
Originally posted by negrospiritual:

Can you offer a valid rationale for tapping the wolf to repair the henhouse?


What this plan has done is create a 700billion dollar distressed asset hedge fund. You and I are investors, willing or unwilling our portion of that 700 billion is now being placed in a risky investment. A lot of hedge funds are in the tank right now, so we not only need someone who can run a hedge fund but someone who can do it well. Where else will such a person come from but from the wolf pack? I no it stinks, but I just don't see any other course of action that has a chance of protecting us going forward.
quote:
Originally posted by zone:
I did not imply that GS didn't or doesn't sell mortgage backed securities, of course they did and likely will continue to do so into the future. Mortgages have been packaged and sold into a secondary market since fannie mae was established in 1938, it's how our mortgage system funds itself. I am sure GS had numerous dealings, buying and selling theses defaulting derivatives.


Are you serious? These new toxic MBS's that Wallstreet peddled around the world were no where near as safe or simple as traditional mortgage backed securites...in fact they were so complex that when Wallstreet firms were developing them even they had to hire physicist's to create mathematical algorithm's in order to map out how investors would actually profit from them.

quote:
Originally posted by zone:
If you want to say they are better connected rather than better at investing I won't split hairs with you over it. The fact remains that they were the only major firm to take a short position in these things and made over 4 billion doing so. I see how well read you are and so I deduce you know that many of the people who think ill of GS now held them up as examples of prudent investing in 2007 when they made that trade.


If a group of frat boys decide to go Vegas and gamble their entire trust funds at the crap table and then blow it all.... but one of them happens to win some of his money back by playing the slots that doesn't make him a genius who should be held up for "prudent investing" he just happened to hedge his bets a little with diversification but the fact remains that he was still in the casino acting a damn fool like the rest of his buddies who lost everything....Goldman doesn't get extra credit for making a nice TACTICAL move when their overall STRATEGY was stupid and greed driven in my book.

quote:
Originally posted by zone:
Goldman no doubt has sub prime exposure. Drawing from the evidence you provided me with I see GS has 1.82 billion in mortgage backed sub prime assets:
which Goldman said includes non-prime residential mortgage whole loans and mortgage-backed securities of $1.82 billion
I see their level 3 assets growing but not all of those assets are bad sub prime loans. The numbers you are throwing around are nearly a year old. I remember 2007 qtr 2 with all the speculation that GS was hiding sub prime exposure I traded GS during that period. Each quarter the GS bears would say here comes the bad news, yet it never came. GS has shown a profit for six quarters since Charles Peabody and others started to feel they were hiding bad stuff on the balance sheet. Do you really believe they could hold out that long? Come on, Merrill has had huge losses for the last 4 quarters in a row.


Level 3 assets are HIGH RISK assets regardless of the fact that not all were subprime...this shows that Goldman was no more responsible in it's dealing than Merrill which by contrast had for less exposure to risky investments than Goldman. Also what does the fact the numbers are from last year have to do with anything? you threw that out like it negates my point which it doesn't. That point being that last year Goldman kept revising it's loss exposure numbers from the subprime market to the upside...and there is no reason to believe that they are not still hiding something to this day.

quote:
Originally posted by zone:
If you want to say hey I just don't trust these guys because you fear nepotism will taint them ok I can understand that. To say you don't trust them because GS is in dire need of being bailed out itself, I think your wrong and apparently so does Warren Buffet.


Again if you buy this notion that Goldman is being completely honest with regard to it's losses I don't care you can beLIEve what you want...But to suggest that simply because Warren Buffet (who is investing in Goldman for precisely the reason that he knows they will be getting bailed out) is doing it somehow means that Goldman is not in trouble is a false conclusion. This is just how the game is played companies invest in other distressed companies all the time...I would hope that you are familar with the concept of Vulture Funds

quote:
Originally posted by zone:
Before we got side tracked debating the solvency of Goldman Sachs I asked you whom would you like to see in that position ahead of Neel Kashkari. I'd like to know your answer, not so I can instantly disagree, but because you seem to have a strong understanding of the markets.


Well considering the rhetorical nature of this question and the fact that it is predicated on the assumption that I agree with this bailout in the first place (which I don't and I direct you to my previous posts as evidence of this) I didn't believe you were seeking an actual answer.

However, since I have apparently overestimated your finesse in the usage of rhetoric...and the fact that your question is actually born of a pedestrian need to know this from me because you respect my acumen...I will now respond to it directly.

Again I must reiterate that I personally would not like to see anyone in Neel Kashkari's position not just him because I disagree with the bailout itself.

Now if I were to play devils advocate (no offense) and I happened to be on the side of this bailout then I would have at least picked someone to oversee this plan to allocate $700 BILLION dollars of tax payer money who was not so intertwined with a firm that was part of the problem. Even if my choices were so limited as to have to choose only people from wallstreet I would have at least chosen someone who majored in and had a background in FINANCE unlike Mr Kashkari who really has an ENGINEERING background and worked for an aerospace firm before going to Goldman. Even when he came to Goldman what was his job? Vice president of Goldman's information technology practice...

so let me now ask you a rhetorical question what qualifies him to head up this MASSIVE distribution of tax payers funds...besides him just being good friends with Hank Paulson of course?
@ LieDecrypter:

I didn't predicate my question on whether you were for or against the bailout plan. That would seem moot since for better or worse the plan at that point had already been signed into law.

I am sorry to offend with my ham-fisted use of language and the pedestrian nature of my question. In today's world it seems that regardless of forum (information age pun intended) or subject those of differing opinions are too often viewed as prosaic, dim or even evil. Sadly it has come to pass that calling your opponent an idiot during debate advances your argument.

By the way when you said:

quote:

Now if I were to play devils advocate (no offense) and I happened to be on the side of this bailout then I would have at least picked someone to oversee this plan to allocate $700 BILLION dollars of tax payer money who was not so intertwined with a firm that was part of the problem. Even if my choices were so limited as to have to choose only people from wallstreet I would have at least chosen someone who majored in and had a background in FINANCE unlike Mr Kashkari who really has an ENGINEERING background and worked for an aerospace firm before going to Goldman. Even when he came to Goldman what was his job? Vice president of Goldman's information technology practice...


Other than the part where you liken me to the devil, your argument persuades me to agree.
quote:
Originally posted by LieDecrypter:

Explain to me how I likened YOU to the devil?...I was actually making it clear that I wasn't trying to offend you...some people are just so sensitive....

Oh well c'est la vie...


Ok so this time I guess it was me who assumed that you were being rhetorical when you said, "Now if I were to play devils advocate (no offense)". I didn't think you literally meant no offence, I apologies for that portion of my reply. I guess I was pissed about your other comments so I read in something that wasn't there. Hell I hardly ever get called sensitive.
quote:
Originally posted by zone:
Ok so this time I guess it was me who assumed that you were being rhetorical when you said, "Now if I were to play devils advocate (no offense)". I didn't think you literally meant no offence, I apologies for that portion of my reply. I guess I was pissed about your other comments so I read in something that wasn't there. Hell I hardly ever get called sensitive.


I suspected that me evoking the word "devil" even within the context of how I used it i.e, "playing devils advocate" might make someone of your ilk uncomfortable so I simply qualified it with (no offence)...ironically it made you uncomfortable nonetheless. Well like I said it wasn't my intent to offend you... and regarding your statement about being "pissed about my other comments"...I would say that is quite unfortunate as well....however, looking at it on the bright side as the saying goes..it's better to be pissed OFF than pissed ON...

Anyway, on another note I have a message for my people...I hope you guys are paying close attention to whats going on. Paulson came out and said inspite of this bailout more banks WILL fail. Interestingly enough this is happening just as investors are seeking a flight to "safety" from the stock market with regard to their funds. So where do you think they are putting their money?...that's right you guessed it the BANKS. They do this because many are still under the impression that the FDIC would come to their rescue in a worse case scenerio. However, this week alone about $185 BILLION dollars in deposits from nervous investors leaving the stock market went into the banking system.

Now for those of you who are studious and have been reading this thread from it's beginning then you will recall me teliing NS that the F.D.I.C. Depositor Insurance Fund currently holds 45.2 billion which equates to only about 1.01% of all the deposits covered by the fund. In other words, the fund holds 1 penny for every dollar it's supposed to protect. Considering the above $185 billion dollar number that was put into banks this week alone... it shouldn't take anyone too long to realize this is a recipe for disaster.

Especially, when even Paulson himself said that more banks might WILL fail....just like a game of musical chairs someone is going to be in a uncomfortable position when the music stops.

So a word of advice to you my people... buy a safe and put at least 35-40% of the cash you have sitting in the bank in it...along with any gold or foreign currency you might have...In the past I would have rarely told anyone to do this... and even if I did I would have maybe said put it in a safety deposit box at your bank....but things are so shady now I think you need to diversify away from financial institutions altogether.

Don't get me wrong I still think you should keep your savings and checking accounts but just make sure you watch things carefully. The last thing you want to do is have all your eggs in one basket in times like these...I don't care how strong you think your bank is it could very well be a zombie bank meaning that the lights are on and it's still doing business but for all intents and purposes it's DEAD...just watch your backs.
quote:
Originally posted by LieDecrypter:

quote:
Originally posted by zone:
Ok so this time I guess it was me who assumed that you were being rhetorical when you said, "Now if I were to play devils advocate (no offense)". I didn't think you literally meant no offence, I apologies for that portion of my reply. I guess I was pissed about your other comments so I read in something that wasn't there. Hell I hardly ever get called sensitive.


I suspected that me evoking the word "devil" even within the context of how I used it i.e, "playing devils advocate" might make someone of your ilk uncomfortable so I simply qualified it with (no offence)...ironically it made you uncomfortable nonetheless. Well like I said it wasn't my intent to offend you... and regarding your statement about being "pissed about my other comments"...I would say that is quite unfortunate as well....however, looking at it on the bright side as the saying goes..it's better to be pissed OFF than pissed ON...

Anyway, on another note I have a message for my people...I hope you guys are paying close attention to whats going on. Paulson came out and said inspite of this bailout more banks WILL fail. Interestingly enough this is happening just as investors are seeking a flight to "safety" from the stock market with regard to their funds. So where do you think they are putting their money?...that's right you guessed it the BANKS. They do this because many are still under the impression that the FDIC would come to their rescue in a worse case scenerio. However, this week alone about $185 BILLION dollars in deposits from nervous investors leaving the stock market went into the banking system.

Now for those of you who are studious and have been reading this thread from it's beginning then you will recall me teliing NS that the F.D.I.C. Depositor Insurance Fund currently holds 45.2 billion which equates to only about 1.01% of all the deposits covered by the fund. In other words, the fund holds 1 penny for every dollar it's supposed to protect. Considering the above $185 billion dollar number that was put into banks this week alone... it shouldn't take anyone too long to realize this is a recipe for disaster.

Especially, when even Paulson himself said that more banks might WILL fail....just like a game of musical chairs someone is going to be in a uncomfortable position when the music stops.

So a word of advice to you my people... buy a safe and put at least 35-40% of the cash you have sitting in the bank in it...along with any gold or foreign currency you might have...In the past I would have rarely told anyone to do this... and even if I did I would have maybe said put it in a safety deposit box at your bank....but things are so shady now I think you need to diversify away from financial institutions altogether.

Don't get me wrong I still think you should keep your savings and checking accounts but just make sure you watch things carefully. The last thing you want to do is have all your eggs in one basket in times like these...I don't care how strong you think your bank is it could very well be a zombie bank meaning that the lights are on and it's still doing business but for all intents and purposes it's DEAD...just watch your backs.


tfro thanks for the info LD. I heard on the radio this morning that someone from the IMF had made a statement with the intent of calming fears about a global recession. I did not get a chance to hear the actual statement. Have you heard anything about this? This was during a conversation about how the Chinese are becoming less willing to act as a big bank for the USA and have lost about 100Billion themselves due to mortgage backed securities. They played a clip of an american gov't rep telling the chinese that there was nothing wrong with the mortgage back securities (last year).
The situation that is occuring now we discuss on several Message Boards prior to the 2000 election. It's all related to the Republicans Plan of "Starving the Beast".

Their intent, while being in Office was to drain the Treasury to the extent that if a Democratic Administration ever regained Power, and decided to re-create their massive Social Programs, there wouldn't be any money left to fund them. It's all a part of their Grand Plan.

The only problem they are experiencing now is that they are not knowledgable enough, nor do they have control of all the related parts. The situation has gotten too large for their abilities. So they are just fumbling around trying to find the proper key.

However you already know that having Paulson and his Goldman Sacks people find a solution to the problem they help create is mostly a joke.

leart
On the CNBC Financial News channel the "Breaking News" headline read: 67 Financial "Superpowers" to Meet to Tackle the Financial Crisis!

And for reasons I don't even completely understand ... that just scares the hell outta me!! Eek

Mostly because it means that "they" are scared .. and obviously have no idea what's going on let alone what to do about it.

And that usually means that it's highly likely that things could get even more screwed up than they are right now. Roll Eyes
quote:
And for reasons I don't even completely understand ... that just scares the hell outta me!! Eek

Mostly because it means that "they" are scared .. and obviously have no idea what's going on let alone what to do about it.


Thay have been running the world on bad grade school algebra for the last 50 years and I bet most of the politicians don't even know it.

When was the last time you heard a politician mention planned obsolescence? lol

um
quote:
Originally posted by Kweli4Real:
quote:
And for reasons I don't even completely understand ... that just scares the hell outta me!!


Actually, this makes me feel a little bit ENCOURAGED. This financial melt-down has been global since day one and will require a global fix. The problem, though, will be getting China to go along.


Oh okay ... I didn't realize it was a global thing. That IS a little more comforting.

The thought of 67 rich white (American) corporate crooks already losing their shirts and then deciding to put their heads together to figure out how to save their own collective asses really was a terrifying thought, to say the least. sck

And also, I would think China is holding a good portion of those mortgage loans ... in addition to the money loans for which we are indebted by several kabillion dollars. So they would have an interest whether they wanted to or not, wouldn't they?? 19

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