We have a fiat currency bubble burst.
Financial Crisis Fundamental Foundation Flaws and Solution
The flaws are articulated in detail as well as the solution which involves a New Global Value Exchange Accounting System they have a list of power questions that media and journalists can ask.
One interesting ironic insight is a small fortune can be made off pennies as a result of the amazing paradox resulting from current market conditions. 1 lb of pennies is worth $6.00 tangible and only $3.00 intangible.
They make an interesting point why shouldn’t the bail out (citizens going into debt) go to pay off the mortgages and then trickle down to those firms needing to be bailed out?
Read the power questions. http://coinage.me/power_questions.htm
Is Paulson Protecting Goldman Sachs”? were they coming up in the next wave of Bank Failures???
His stock shares in Goldman Sachs reached a “LOW” of $85.88 Sep: 18th:: Then reached a “HIGH” of $144.91 Sep 19th: :
“GOOD Move HANK” Paulson, I bet you are a “HERO” at Goldman Sachs and the other “GOOD OLE BOY” Finanicial instutions:
YEP THAT’S ME A SHAFTED TAXPAYER”
RAPE and PLUNDER the TAXPAYER!
Keep the “RICH” in “POWER”:
“SHAFT THE MIDDLE CLASS TAXPAYERS”.
THIS IS RIP-OFF TO BAIL OUT PAULSON AND BUSH’S RICH FRIENDS;”
We had Bail-Out under REGAN–BUSH Sr.–now BUSH Jr.:
Why do we only have Bail Out Of Big Fat Cat $Bank, $Savings-Loans, Financial Instution’s during REPUBLICAN CONNTROL OF WHITE HOUSE???
$$$Bank Failure Count: 2008’s 11th bank fails, McCain’s son was director
The bank in question is Nevada’s Silver State Bank.
John McCain’s son, Andrew, who is also CFO of his mom’s beer distributorship,
“sat on the boards of Silver State Bank and of its parent, Silver State Bancorp,
The failure — which was caused by “poor-quality loans primarily related to real estate
development” — will cost the FDIC deposit insurance fund between “$450 million [and] $550 million.
Silver State’s motto was “When the casinos treat you poorly, let Silver State treat you like a valued customer,”
Andrew is following in his father’s footsteps.
John McCain protected ” Charles Keating ” from government regulators because he had arranged a real estate dealfor his second wife, Cindy. The failure of ” Keating’s S&L cost taxpayers $3.4 billion”.
Taxpayers got off relatively cheaply bailing out Andrew’s former colleagues. “KEATING FIVE”.
I disagree with you Mike. The Democrats made attempts pto pass legislation to shore up and regulate the goings on on Wall street but the republicans, like they always do let their fat cat contributors run amuck…AGAIN! This behavior is nothing new though. It happens on every front that the republicans stand on. Perk the wealthy and priviledged and screw the middle class tax payer every time.
Here’s the real news!
In 1999 the Clinton Administration relaxed the rules and caused this problem. The Democrats in congress ignored the warning signs and blocked the Republicans from correcting it before it got this far first in 2004 and again in 2006. John McCain himself warned about Fannie and Freddie and the High risk mortgages two years ago. The Democrats blocked passage of his bill that could have prevented this.
In other words, John McCain saw it coming and tried to convince congress to act. The Democrats blocked him while Barack collected the 2nd most in donations from Fannie and Freddie.
The media is not interested in this fact… Instead, they’re more interested in how many cars John McCain owns.
I challenge CNN to make that headline!
THE GLOBAL IMPLICATIONS OF AN AIG FAILURE WERE SUFFICIENT TO WARRENT THE ACTION OF FED. NOW, REGULATIONS TO INSURE SIMILAR SITUATION DO NOT OCCUR IN THE FUTURE NEED TO BE PUT IN PLACE.
Fed lending to AIG is a bad idea. AIG is a big part of the ’shadow banking system’, and this system is now failing and collapsing. It would be a good idea for the Fed and Treasury to stick to their mission of regulating the ‘real banking system’, and this system is actually doing reasonably well. The only troubled banks are the ones that invested heavily in junk mortgages. The strong banks will eat the weak banks, just like vultures eat meat only after it’s dead.
On the other hand, if our Fed and Treasury can continue buying assets at 10c to 25c on the dollar and reselling them at 50c on the dollar, that sounds like a pretty good business to me, potentially a big money-maker for the taxpayers. Boy, those Wall Street guys sure are dumb.
Incredibly BAD idea! The true value of AIG’s holdings is NOT KNOWN, so therefore a “value” for them can’t be known either. $85 billion will be like spitting in the ocean.
Where does the “FED” come up with $85 billion dollars anyway? Ahh, confiscation of the citizens assets (eventually), but outwardly more quickly by just “creating” the money out of thin air (we own printing presses just for this purpose).
Worldwide government institutions are “creating” money out of thin air at an incredibly rapid pace. The monetary system is consuming itself in a self-canabalistic fashion on a worldwide scale.
This is BAD, BAD, BAD news, and it’s getting worse by the minute. The IMF is warning that additional “bank” failures are imminent. Hyper-inflation is the long road ahead.
US government is buying trillions of dollars worth of business in AIG for price of $85 billion. I consider it a good business sense.
US government is donning a socialist cap, thus diluting public investment, is definitely a sign to worry about.
On a lighter note – When MSFT (Microsoft) shares hit $24 price, everybody, please say ‘Cheese’.
US government is buying trillions of dollars worth of business in AIG for price of $85 billion. I consider it a good business sense.
US govenrment is doning a sociatist cap, thus diluting public investment, is definitely a sign to worry about.
On the lighter side – When MSFT (Microsoft) shares hit $24 price, everybody, please say ‘Cheese’.
Decades of economic practices that produce impressive short term results at the cost of genuine health are catching up with us. The idea that we can somehow avoid the consequences of this is silly. In fact, it only makes the recovery process longer and deeper.
Is this new bailout (oh yes it is) a good idea? I can’t help but think no. I am tired of watching “them” set “us” up for a longer deeper hard time. Just rip the damn bandage off and let us get on with it. This is just more pretending we can avoid the pain.
What is that projected 407 Billion Deficit up to now?
It seems to me that when the stock market crashed in 1929, federal regulations were put into place to prevent monopolies. The government should let the assets of these giants be sold off, but restrict how much can be sold to foreign investment. It was very obvious that neither the Democrats nor the GOP wanted to talk about this crisis during the primary races. This mess has been building for a long time. Unrestricted globalization of the economy has done just what everyone has feared…the largest corporations have been allowed to rape and pillage the economy across the world. Why have governments allowed it? Check the bank accounts of those responsible. Let these giants fail. PS -and don’t allow CEO’s to run off with 9 million dollars of the taxpayer’s money for three months worth of failure.
Today, Russia begun phase 1 of Oligarch bailout as the Oligarchs did not return margin calls three large Russian banks are at the brink of collapse. Their reserve spent a mere $44 billion. They have $ 500 billion more to bail out 10 Oligarchs. FED’s bailout mania is contagious.
Only time will tell if the bailout was successful. I believe that the Fed was correct in their assumption that if AIG filed for Chapter 11 this morning the World Markets would have been “rocked” to say the least. If AIG does what is says it will do, in liquidating its assets over a period of time and repaying the fed with those monies, the bailout should be successful as the decline og AIG will be slow therefore not causing a sudden shock to the market such as Lehman Brothers Chapter 11 filing on Monday. The problem of the matter lies in the fact that the government is now stepping back into the banking industry much like it did before the Great Depression (I know AIG is not a Bank) and should the government learn from history this is a recipie for disaster.
What I want to know is, now that we the taxpayers own 80% of the world’s largest insurer, do we all get “free” national health insurance? Seems like the $85 billion premium we’ve paid should get that done.
It’s bad. But it’s not the idea that causes this. Deregulation was the root of these messes. Still think the top 5% shouldn’t pay more tax? They have racked in tons of bonuses for the last several years in row…
To HJ James,
that government doesn’t exist. I think the one you are asking about is the gov’t “for the people except, by the people except, and of the people except.” Except that government doesn’t exist either. It’s more like a gov’t “for the big business, by the big business, and of the big business.”
Why doesn’t the Fed just send each person in the USSA a check for a billion dollars? Wouldn’t that solve all our problems?
Paul,
How touching that you have solicited reader feedback on this issue. Why do you ask? Can you get the current leaders of the gov’t “for the people, by the people and of the people” to listen to “the people?” Otherwise, don’t waste our time.
I think the question should read, Is the decision to loan 85B to AIG a bad idea or a really bad idea? “Good” went out the window a long time ago in the early 2000’s when the Fed did everything but its job in overseeing the financial scene and the extreme asset bubble it allowed to develop.
I believe the Fed has this responsibility described in the United States Code, Title 12, Chapter 3, subchapter 7, section 301.
Since good is only relative to another good or bad thing, the Fed’s bailout is tepid at best. It avoided the impending doom that almost hit this morning, but the value of this decision will come when and how AIG sells its’ assets and pays back the dough. At the moment it is too soon to tell if John B Taxpayer will get hit by this one thing specifically, but who knows.
one other thing…
Laissez-faire and an ill-tempered unresponsive (when it counts) Federal Reserve do not mix well. Couple that with men and women conducting business based on coersion, ignorance, and greed, and you get a severe market correction.
“Good” or “Bad”? Are those our only choices? How about pathetic? or silly? or reckless? or too late?!
Isn’t it ironic that the Fed is doing the same thing that got us into this crisis of excess debt creation? The banks lent to folks with little ability to pay back the loans and now the Fed is doing the same thing, acting as if they haven’t learned a thing in this crisis.
Is this the Fed’s idea of “contained” that we were hearing about way back in the spring and summer of 2007?
Is it too late to get out of the market? Who knows? It is very late to be sure, but when the Dow drops below 10,000 then it will be too late. Any rally over the next few weeks or month will likely be the last chance to bail out before the bottom. Dow 10000 to 10250 could be a very nice time to start buying back in, but don’t be too greddy about it, slow and steady will win the day.
I don’t see the Fed jumping through hoops to help the “working man” when his 401K or other retirement portfolio collapses. AIG, Bear, Fannie and Freddie should not be bailed out. Let the free market rule. The average American people are not being treated in a fair manner. The way the Fed and the rest of the goverment rule needs to be overhauled in a big way.
The next step is to fire top manmagement for gross incompetence and greed. For cause, no golden parachutes to be funded by the taxpayer (on second thought keep them on but demote them to window washers and trash haulers; let them quit; wonder how their Armani suits will fit with the new job descriptions)
Quintessential pump monkey? It’s an amusing term but I think you are being too hard on me, Dave. All I have done and will continue to do in this column is point out when the market’s reaction, positive or negative, is irrational. I still think that the sell-off in all banks simply because they are banks is overdone and that there clearly is an element of panic selling/shorts piling on. I’ve never maintained that “everything is ok” as so many readers accuse me of doing. I’m simply not in the camp that this is the beginning of a Depression. And just because I’m questioning whether or not it was a good idea by the Fed to save AIG does not suddenly make me a market bear.
What’s more, I have never ever once defended the CEOs of these financial firms and it is my sincere hope that they do not receive big golden parachutes. They most certainly do not deserve anything.
Take care and thanks for posting.
PRL
Paul the quintessential pump monkey actually showing a little doubt in his writing about the health of the economy? Will wonders ever cease? AIG is a bailout. The ‘FED’ will take the profit of course and the tax payers will be left with the fatty, grissely part that none of the other buzzards wanted. This entire fiasco with F&F, MER, AIG, BSC and soon to be WaMu and WB is the greatest fleecing in the history of the world. Money doesn’t disappear; it changes hands. Right now it’s flying out of the hands of the middle class and retirees and landing in the hands of the crooks that orchestrated this scam.
Paul,
Bailouts are a bad idea, in general. The bailout of AIG is a disaster. The reason that these companies are struggling is that they have taken risks that just have not paid off. Now, instead of letting them fail, we are propping up poor performing companies with taxpayer’s dollars. This all leads to the overall destruction of true wealth. We are dumping good money into bad businesses. The good money should be held onto by the taxpayers to save and promote growth in stable, good businesses. Instead, our benevolent Federal Reserve and Treasury Department will throw the money into a sinkhole, thereby destroying true wealth creation.
True economic growth comes only through real savings and prudent investment in stable businesses. We are on a path to prolong and deepen the coming recession. One question to ask is: If the market will not invest in these guys, why does the State think that they are good investments?
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We have a fiat currency bubble burst.
Financial Crisis Fundamental Foundation Flaws and Solution
Congress is tapping into this info today.
On http://coinage.me/
The flaws are articulated in detail as well as the solution which involves a New Global Value Exchange Accounting System they have a list of power questions that media and journalists can ask.
One interesting ironic insight is a small fortune can be made off pennies as a result of the amazing paradox resulting from current market conditions. 1 lb of pennies is worth $6.00 tangible and only $3.00 intangible.
They make an interesting point why shouldn’t the bail out (citizens going into debt) go to pay off the mortgages and then trickle down to those firms needing to be bailed out?
Read the power questions. http://coinage.me/power_questions.htm