Getridofthemnow

3 Things America Needs to Do to Get the Economy Back on Track

Great article

Buffett Warned Us in 2003

Excellent article/post. Thanks for sharing. Now, let us not socialize the whole system. Wait. Reverse that. It's already happened. Time to go drink some vodka comrads.

Let Lehman Fail

Secretary Paulson should be indicted. This may not only be necessary for Paulson, but others that have been at the heart of the recent mistaken aggressive government actions that wrongly seek to prop-up private sector “bets” using public monies. Worse, Congress has often praised Paulson, and Chairman Bernanke, for their actions, and has even facilitated these actions in the case of FNMA, FHLMC, and the Home Loan Banks by giving legal rights for their bailout by the passage of the Housing and Economic Recovery Act. Congress, too, should be ashamed for putting faith in the hands of such cabals as those used by the Federal Reserve and U.S. Treasury; cabals whose private meetings behind closed doors are not subject to the bright light of public debate and transparency. For his part, Secretary Paulson, as former Chairman and CEO of Goldman Sachs, is not an altruist. His actions are, by all those who are in the trenches, well known and of obvious design. His desire, like many on Wall Street, is to push the volume and activity of mortgage business structured transactions through and across the desks of surviving Street broker-dealers. By building a “covered bond” market, and collapsing FNMA and FHLMC, where does Congress think the “volume” of deal flow will go? The UST is pressuring SIFMA, ASF, and even four large banks to quickly issue covered bonds to get the market going, with Bank of America planning to issue in November. Under the auspices of “trying to find a solution” to FNMA and FHLMC, such action may look quite innocent, but it is anything but innocence. It is deception, design, and deceit. An investigation into the power dealing on this very complex topic should certainly be taken. And what about the Home Loan Banks? Without the Home Loan Banks, where will the deal flow go? Who will profit from a reduction in force and size at FHLMC, FNMA, and the FHLBs? The answer is: Wall Street, and more precisely Goldman Sachs. This is not to say that Congress, at the warning of former governor Poole, shouldn’t have acted years ago to sever completely the ties with FNMA and FHLMC. Clearly, FHLMC, FNMA and the FHLBs should be completely privatized. Congress was irresponsible for not acting, and now we are faced with today’s crisis. However, to empower a man as disingenuous and self-dealing as Paulson with the ability, power, and nerve to act in a manner befitting a socialistic country – in fact to act as a financial market “warlord” - is shameful. The precedents set under his actions, and Chairman Bernanke, are disastrous; the actions criminal; and the response of Congress should be firm, and peppered with investigations. Congress should immediately seek to terminate the role of Paulson through an immediate Cease and Desist order, and should ask for the resignation of Bernanke and Paulson. Congress, as an interim step, should ask former governor Meyer or, if willing to break from Obama’s campaign, Paul Volker, to step in on an emergency basis. A plan should be set immediately for the “break-up” of FNMA and FHLMC into smaller pieces. All government backing should be severed within 12-months, with a private goal of an even shorter period. The same should be done for to the Home Loan Banks. Congress should commission a plan for a market and regulatory reform, and as general principle must be to reduce the size of financial intermediaries. No one bank or financial firm should have such systemic importance to imperil the entire system. This is so obvious on the face of it as to be self-evident. Yet, contrary to abiding the advice of former Senator Proxmire, who during Greenspan’s confirmation hearings in 1987 warned against firms “too big to fail”, we – Congress and our financial system regulators - have done the exact opposite. Banking is not retailing. Banking serves a critically important function in markets and societies. Throughout the history of the U.S. we have seen banks to good and severe harm. One thing that is clear: concentrations can kill. Can kill not only banks, but entire towns. Not only towns, but entire markets. We cannot let the “fox in the hen-house”, yet this is precisely what we have done with Secretary Paulson. We cannot let the “theoretician” rule the lender of last resort, and this is precisely what we have done with Chairman Bernanke, a man who knows virtually nothing about the real working of Wall Street. Congress needs to act. I trust and hope that the hearings set for next week will begin a process of restoring confidence in the leadership of those in these positions of power. To date, they have failed me, my children, my city, my state, my country and our collective honor. Do what is right: remove Paulson and Bernanke immediately.