bobomite

Cramer's Stop Trading! Citigroup Is Red Hot (8/11/09)

I think the previous and current administration have both shown that they will do anything and everything to keep the big banks afloat. Hmmm, reminds me of the "implied gov't backing" of a couple other GSEs.

So, my prediction is that their stocks will run up, the banks will take more risky moves, and when the price starts falling you know that the insiders got the word that there would be a partial takeover.

Then after the price collapses, they will buy the stock at $.15 a share and enjoy the miracle bounce when the bad assets are stripped and the company released from bankruptcy in an amazingly short time.

Well, at least we all learned something from the big credit bust. I think we learned "rinse, repeat."

Rethinking Subsidized Finance

The government should lend for houses, schools and capital purchases. The interest collected should offset income taxes.

Commercial banks would still exist - they can do business with anyone seeking more than these basic and fundamental services, such as credit cards or LBO action. The commercial banks would do this by borrowing money from the Treasury. (Not the Fed.)

To Avoid Failure, Get Really Big; Everybody Else, Watch Out

The Federal Reserve System is owned by the largest of those banks. I am going to take a wild guess that the banks doing well own the shares.

The Fed is not our friend at all. Neither Bernake or Paulson can be trusted in this matter in the least.

The US Government is charged with issuing currency, debt free currency. Paying interest to the "Fed" for our own currency is the beginning of this debt spiral we now see unwinding.

The solution is really simple.