DiracMan

Charlie Gasparino: Another Crash 'Has to Happen Again'

Are we in April 1930 (the worst to soon start after a 95% stock recovery from October 1929) or July 1932 (the Great Depression in full gear after stocks had lost an astounding 95% of their value in essentially seven more stock market crashes and the country completely on the ropes for 12 more years)?

The market recovery to April 1930 was sustained by professional market game players doing short selling and buying what they thought were bargains amid various other footwork schemes and insider pure money play maneuvers. None of it was any real investing in anything. Just manipulation of the financial system for personal gain. The underlying causes and abuses in the system were never addressed. People were deluded into thinking the water tight doors on the Titanic would hold. The other shoe dropped. And the rest was history.

Any similarities to March 2009-November 2009?

Will there be a second panic, crisis, and break?

I have been thinking about this a lot because the charts are so similar and the failure to address underlying abuses so in parallel. Then it was the prevalent ideological passivity not to "interfere in markets" Now it is more and more obvious that it is the unholy alliance between the halls of Washington D.C. and Wall Street. This article points out a feeling of great unease to me.

Where will the next catastrophic event of hubris come from with nothing being really done to address the rivets on those supposedly water tight doors under the water line?

The greatest thing that suddenly jumped out at me from this article is the image of Goldman Sachs as now the greatest wild eyed Al Qaeda suicide bomber on Earth. Skin taught. Half dollar sized eyes sunken into darkness. Three days growth of stubble beard. A TRADING INVESTMENT BANK bank now backed by the Federal Reserve and the machinery of the Government of the United States and it's TAXPAYERS! The bomb is now a strapped on FINANCIAL NUCLEAR WEAPON parcel suspended in the olive drab web gear. Any instrument of deranged excessive risk that leads to endless bonuses for the insiders. can now take down the entire world AGAIN on ROUND TWO! Any new kind of open ended derivatives scheme in the unregulated OTC market and the sea water can come rushing in to pull the ship down, then vertical, the the engines breaking lose to crash out the bottom and rip the hull full open to the sea.

Very sobering. We have now created something perhaps not seen since the treasury of Spain was put behind the conquest of Inca Gold that eventually bankrupted the country. A TRADING BANK backed by the TAXPAYERS OF THE UNITED STATES!

We live in amazing times and it just seems to go on and on with no end in sight.

Citibank's Problems Are Far from Over

Excellent post.


On Jul 19 04:30 PM Fourpenny Guy wrote:

> The problems with Citi have been manifold:

There Won't Be a Recovery

This is now a very fashionable meme among the muddled ideologue Econ 101 "D" student right, but the facts do not bear this out at all. The majority of CRA loans were actually paid off! Google it. There are many links about this out there. People did not get a jumbo mortgage on a CRA program.

The mortgage component in all this was relatively contained. The true deuterium trigger in all this was the Credit Default Swaps that has now led to the full blown financial nuclear event. The CDS's were the fissionable multiplier. This is the simple fact.

www.rollingstone.com/p...
www.villagevoice.com/2.../
www.countercurrents.or...

At least have the decency to put down your photo of fellow class ideologue poster boy Joseph Cassano and just get a recent issue of Playboy.


On May 17 01:03 PM MudEngineer wrote:

> I give high credit to Schnickelfritz for actually pointing out the
> basic foundation of sand that the housing boom was built on. The
> CRA and ACORN and the below named Democrats accelerated the demise
> of our great country by mandating that "everyone" should be able
> to own a home and then the banks created derivatives to be able to
> unload the obviously flawed loans on third parties. The derivatives
> were so incredibly complex that even the rating agencies could not
> understand them and pronounced these junk mortagage packages to be
> A+ rated or better making it very easy to sell the junk. The resultant
> mess is history that is still unfolding and now being compounded
> by a like thinker in the White House who is applying the same theory
> to everything along with a take from those who have and give to those
> that don't want to help themselves but just "want".
>
> "Where were YOU when the marxist Democrats were mandating that common
> sense and the regulations be overridden and that mortgages via the
> Community Re-Investment Act, specifically changes made circa 1994
> (Fannie, Freddie, Frank, Dodd, and ilk) be given to people who didn't
> have the means to repay those loans???"

There Won't Be a Recovery

"A dispassionate eye, equitably minded, would regard the current gross imbalance among haves and have-nots as a simple case of injustice, easily rectified. Those traveling daily in jets and Escalades leveraged the savings and credit ratings of the common people to agglomerate assets onto their own balance sheets to satisfy a sense of entitlement derived from an overpriced education."

BINGO.

I had one of those elite educations and I saw what was happening 40 years ago. The greatest way know in history to control a group of people is to make them think they are an elite. "The Marine Corps" technique. Once you have them thinking they are an "elite" with "special worth" you can send them to their death with impunity or you can destroy their souls with impunity. This is the Faustian bargain between Wall Street and the Ivy League Universities that has grown ever deeper since the end of the common military draft in 1973. After Vietnam the mantra of "other people's lives" expanded geometrically to "other people's money". This metastasized obscene meme of entitlement became a virus in the soul of our society that is now in the process of killing the host.

The known history of the entire world is the history of mind bending catastrophe caused by the unchecked power of criminal elites in every society. All such groups will turn into collective sociopaths with almost mathematical precision. It does not matter if it is "communist" or "capitalist" in label. The key is the depth psychology involved in the system of self definition entrenched in the ideology de jour.

A society like ours with supposed checks and balance in it's system of government designed to prevent this must take daily stock (pun intended) of the Faustian bargains at work in it's society at any given time and call them to account. Otherwise a system of entrenched predatory vampire replication will destroy everyone. That is clearly where we are now. Hold a mirror up to these souls and it will be empty. The same old, same old in human history. It all happened because of the massive failure of electorates decade after decade since WWII. The Military Industrial Complex and the now "too big to fail" New York Banks run the United States lock, stock, and barrel with total impunity.

Without the re-establishment of equity at every level of our society we are in very big trouble. Anyone who does not think push is now going to come to shove does not know history.

Always be aware of the Faustian bargains at work in your society at all times. This is one of my favorite Zoroastrian scenes in American film. Lifted right from St. Matthew! The screenwriters took the rest of the afternoon off that day.

www.youtube.com/watch?...

For a more personal system of insight, everyone here should know that this has ALREADY been done to you. You just don't fully know it yet.

www.youtube.com/watch?...

The Worst Case Scenario (Someone Has to Say It)

Well said.

www.youtube.com/watch?...

On May 03 10:11 AM Doc 224899 wrote:

> "...people will have less money to spend on lawyers..."
>
> Finally. We actually need about 5% of the lawyers we now support.
> Lawyers feed off the carcasses of just about every person and corporation
> that is productive. Lawyers make money off people with personality
> disorders, the individuals who would have been kicked out of the
> wago train 130 years ago, or chased away from the cave and fire 20,000
> years ago.
>
> It's time to subject the legal profession to the same critical reviews
> we apply to health care (a service we can't live without), to reduce
> wasteful spending on legal services (which we can hardly tolerate).

Markets Soar as President's Aura Fades

This is one of the worst most insipid Johhny-One-Note articles I have read in quite some time! How can the signature market graph of murderous and predatory short sellers for the last several months be tied to what President Obama is trying to do? Sure, he and his Administration have made mistakes, but they will learn. Who hasn't on the first series of downs in a big game. Any of the effete Little Lord Fauntleroy Momma's Boys writing this article ever play in Division I? It is still in the 1st Quarter yet. Give some time to the Man in the Arena.

Their initial mistakes are very minor so far compared to the criminal mistakes of the idiot scum that ran the financial markets of the United States completely into the ground over the last ten years! This is a nation of clueless deranged financial criminals on Wall Street that didn't even learn ANYTHING AT ALL from the implosion of LTCM in 1998! Duh! What happened then in microcosm is now happening on the world stage in macrocosm. Just amazing stuff!

For example, Credit Default Swaps are useful between parties that actually hold the debt instrument. But naked Credit Default Swaps are gambling via financial thermonuclear weapons! They are instruments of national economic suicide and they were manufactured on an assembly line of irresponsible mass financial death in the U.S.A. over the last ten years by crazed Free Market Taliban and their mindless Financial Shira Law. President Obama has essentially inherited "FINANCIAL SAW XIV: THE MOVIE". It is a horrible mess.

The people that wrote this article represent a mentality that has destroyed the United States and they will surely spend eternity in the innermost rings of the worst Zoroastrian Hell for their financial crimes.

Why CDS Buyers Are Not Crazy

"Therefore the protection buyer gets the cash upfront and is NOT EXPOSED to the protection seller credit risk."

But the taxpayers of the United States ARE exposed to the protection seller credit risk! DUH! Especially to exposures not hedged (gasp) like AIG's breathtakingly mindless plutonium is reputed to be!

We are in a Wall Street circular firing squad led by blindfolded drunk madmen amid empty Vodka bottles firing pistols into armed nuclear weapons in a sealed room.

Just unbelievable!

What 'Wipe Out the Stockholders' Really Means

COB,

Very thoughtful post. Please break your silence more often! From a micro level what you say is prudent and quite accurate. But I believe the crisis is systemic and is on a macro level the world has never seen before. This is because of the Credit Default Swaps potential fissionable chain reaction multiplier on any default event that would normally be contained by being limited to the counterparties that hold the debt.

It is like the movie "Speed" that if the stop the bus it explodes. The Federal Reserve and the Treasury cannot let any of the zombie banks fail because it will be Systemic Financial Armageddon.

What do you think of this article?

www.villagevoice.com/2...

Is it hokum from your viewpoint? After five months of careful research I say this analysis is the truth of the situation.

It appears to me we are in a very real version of "FINANCIAL SAW XIV: THE MOVIE". Damed if you do. Damed if you don't. All roads lead to annihilation no matter what choice is made.

I would be interested to hear your viewpoint.

Thank you for your post today!
On Mar 01 10:49 AM COB wrote:

> I rarely blog or respond online but this post is at the core of what
> is wrong with the approach to our economic issues. TIAA CREF and
> other pension funds are not innocent or unsophisticated bystanders
> that the rest of us should bail out. sorry, but pension holders
> will have to feel some serious pain on par with the bondholders,
> current employees and others....while the shareholders get wiped
> out. We have reached the point where 80% of the population is being
> directly or indirectly bailed out from bad investments propagated
> by the "others". The "others" always trace to a convenient list
> of institutions "too big to fail" so government interference is pretended
> to be the only option. What is wrong with the time tested bankruptcy
> process in which pension holders are first in line for benefits during
> the reorganization or liquidation? Instead, the author is proposing
> to artificially prop up the value of the equity by constantly injecting
> cash into the enterprise....or allowing false accounting to avoid
> covenant defaults.... in the hope that some day the future discounted
> free cashflows will justify the value on the books.

Was the Global Equities Crash Related to Obama's Election?

Exactly. This is a completely ridiculous argument. Obama started rising in the polls when the public began to understand we were in total free fall and the Banksters and their GOP political party of choice were clueless on what to do.

Bushco had more than a year to start to deal with this crisis and did absolutely NOTHING. They should have had a completely thought out plan well before clueless Paulson began to brown his pants on an hourly basis in September. AIG/Lehman was every bit a Viennese Credit-Anstalt 1931 event. (Google it) Paulson did not know his history. Only the knee jerk play book of the ideological "free market" Taliban. The effect of this catastrophic blunder is still reverberating across the world and will continue mercilessly.

This was written OVER A YEAR AGO!!! THIS WAS ALL CLEARLY FORESEEN!!!
www.minyanville.com/ar...

Did Obama suddenly sell CDS fissionable financial plutonium to the entire world starting in September 2008? I think not, sir.

Does the writer of this article know what a Credit Default Swap is?

www.villagevoice.com/2...

Smick started writing his book which details more than EIGHT potentially catastrophic global bubbles well BEFORE Obama was even a serious contender!

www.theworldiscurved.c.../

The ghost of CONGRESSMAN C. AUGUST LINDBERGH is now upon the 300 year system of fractional reserve banking invented by the Bank of England and those who ran it beyond it's limit completely into the ground. History has vindicated him.

books.google.com/books...

Judgment Day has come. Califia Beach is going to be completely washed out to sea with all the group think ilk that sun on it.

The jig is up. There will be a total re-think of the Federal Reserve System over the next eight years as the crisis rages on across the world.

To blame all this on Barack Obama is criminal. It is a lie. And perpetrating a lie is very bad karma upon one's wife and children in the Cosmos. Very, very bad indeed.

On Mar 01 08:49 AM akapital wrote:

> hey, yeah, you know what else I noticed, whenever it rains I see
> lots of umbrellas...I think umbrellas are causing the rain...
>
> As for nationalizing/socialis... a clue...gov't has been bailing
> out companies long before Obama came along. Are you serious?
>
> Wow, I am embarrassed for you...

Reports of Economy's Demise Are Greatly Exaggerated

Tell me what your explanation is about NAKED Credit Default Swaps as a legitimate economic function from your derivatives buddies? Government regulation was withdrawn ten years ago and financial markets were turned into gambling casinos just like bingo night down at the VFW. You accusing Obama trying to "seize power" is right out of Michael Savage's incessant drumbeat.

I played Division I major college football. I would not walk on a football field that had no referees. In high school maybe. But not in college. The talent is so fierce you could get killed without referees.

Government has a legitimate function as referee doesn't it?

You have been listening to Rush Limbaugh, Shaun Hannity, Glenn Beck, and Michael Savage too long. It is all Johnny-One-Note broomstick-up-the-ass RepubliCON yammering. Get something more original ideas.

And since you love your economic politics so much, thanks for your military service to our country. You did serve, right? You did put your lily white yuppie ass on the line, right?

Yawn.


On Feb 25 10:01 AM know nothing wrote:

> If you had financial trouble at home, you'd cut spending right away.
> You wouldn't borrow another penny, and you'd make it a high priority
> to pay down all existing debts as fast as possible. And yet, Obama
> thinks saddling us with another $800 billion of pure pork will somehow
> mysteriously "stimulate" the economy. It's not true. It doesn't work
> that way.
>
> The economy doesn't depend on spending and credit. Spending and credit
> depend on the economy, the productivity of you and me, which in turn
> depends on politicians like Obama getting the hell out of our way.
> I think Obama knows this, too. He knows his $800 billion package
> is no damn good. He's dishonest enough to go through the motions,
> no matter how destructive, to give the appearance of taking action.
> He really just wants power. He wants to tell you what to do and for
> you to worship him in return.
>
> No one seems to understand government is the problem. Most people
> say, "The government ought to do this" or "the government ought to
> do that." Nobody ever says, "The government ought to leave us alone
> and stay home, while we the people work this out amongst ourselves."
>
>
> I think it was Elbert Hubbard who wrote, "Grown men don't need leaders."
> I don't know about other types of leaders, but we sure don't need
> political leaders like Obama, not during tough times like this. At
> times like this, we need to be left alone to work out our problems,
> without the busybodies inside the Beltway making it even worse than
> they have already.

A Blast from Ben Bernanke's Past

Adrienne,

An excellent analysis! I would love to take you to lunch on your Birthday some day if we should ever meet. If the current film script I am working on gets made, I'll look you up.

But what we really need here is the same analysis of Geithner. Not his portfolio. But his horoscope. A close female friend of mine was almost the astrologer to Margaret Thatcher. She is brilliant. Absolutely first rate. Has many friends in big business and Hollywood. If I can get a reading from her on Geithner, I'll post it. Unfortunately she is very moody and is not speaking to me at present. But once, uh, her planets change I may be able to communicate with her. She made a believer out of me. She was amazing in what she could foresee. The main thing I learned from her is that when people are put into positions of great power, the first thing you look at to try to figure them out is to make an analysis of their decision history to see if they have developed the maturity and cosmic understanding to overcome their basic tendencies against their native chart.

My guess is Geithner hasn't. I think an analysis will show he always goes with his raw cosmic tendencies as you have pointed out with Bernanke. He is at no higher level of understanding of himself. My gut read is that the level of functioning of these two men is nothing more than that. They are white belt puppets pulled by their simplest base line cosmic energies. Not good. Not good at all. In guitarist terms this is the difference between a local wedding band and Stevie Ray Vaughan.

I believe with Geithner and Summers we are being led by mind bendingly Johnny-One-Note people and the results are going to show accordingly. I fear they are completely conventional people who are going to be drowned by what we are facing.

www.youtube.com/watch?...

Rick Santelli Speaks for the Silent Majority

Yawn.


On Feb 20 03:22 PM DuffBeer wrote:

> Being from Chicago I got the chance to watch this CiviL Rights Attorney
> in action over the past 10 years.
> He is doing just as he siad he would Rob from you and give to those
> that are non producersand are in need cause they do not and will
> not work.
> I wish I had 5 bucks for everytime I heard " we ani't rich yet "
>
> The right knew ,the rest got just exactly what he is a leftist.

>
> The elephants will gather up in 2010 and start a new circus in DC.

>
>
> Obama did all this in 2 weeks -- He is the Messiah for the left

>
> they shall be rich soon
>
> I am now going to go hide my beer so the liberals do not tax it to
> death to !
> Oregon to increase the beer tax over 1000 % it begins oh my

>
> Cheers, DuffBeer

Rick Santelli Speaks for the Silent Majority

Yawn.


On Feb 19 05:01 PM The Driver wrote:

> Who is John Galt?

Rick Santelli: The Best Five Minutes in CNBC History

Amazed in NC,

What about your guys Bush and Paulson that turned on the printing presses through Bernacke and created the People's Republic of Wall Street? Who is going to pay for that? And all that was to pre-position liquidity into the system to cover a Credit Default Swaps financial nuclear weapons chain reaction detonation? The mortgage situation is chump change. Both conservative and liberal investors on Seeking Alpha are toast. All of you. And your wives and children too. Same with this Thomas Smicklas and Little Lord Fauntleroy Rick Santelli. It is all far too late. You will all be in the streets too living out of your car where it runs out of gas and crashes along the road. You are all whistling in the dark. My prayers are with Obama . He may try to fight the good fight. But the odds are it is far too late now even for him. Where is the Credit-Anstalt 1931 event out there over the horizon going to come from?

Wall Street did it to you without even ever using any Vaseline. At least as a military veteran I'll be able to handle myself in the coming chaos. I wouldn't waste a bullet on any of you neocon never served punks on this sorry thread. I would just use a bayonet and let you bleed to death in your "free market" worthless investments.


On Feb 20 04:14 PM Amazed in NC wrote:

> I am truly amazed at the number of socialists on this site and their
> lack of understanding about free market. Truly dumbfounded. Take
> for example the comments from "russ" where he states "Ending the
> downward spiral of forclosures and declining values will do more
> to remedy falling assest value than all the idiot screaming reporters."
> What an absolute moronic statement. First off, what Rick was stating
> is that taking money out of MY pocket and giving it to some other
> idiot (neighbor or not) just because that person wanted a house bigger
> than they could afford because they are buying ATVs, vacationing,
> buying new cars, etc... is JUST PLAIN WRONG. I say TOO F$%^&ING
> BAD. They made their bed so now live in it. Here, I got an idea.
> For all those socialists that like this PLAN, then I say TAX them.
> Just stay away from my money. By my calculation, that means the
> 50% of you morons that voted this inexperienced clown in, can pay
> twice as much and cover all of us. That way, we all sleep well at
> night.
>
> What a freakin moron!

No Easy Way for Banks to Actually Demonstrate Viability

Exactly.

www.villagevoice.com/2...
----------------------...

Yopu left out derivatives positions. It seems simple. Just ask a bank if they have more than 10x their assets in derivatives. If yes, they are probably not viable. If they have over 100x they are 100% not viable. Of course the Fed and Treasury can't do that because it will bankrupt the ones who they are trying to keep alive for some ponderous reason like Citibank.