DiracMan

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).

Sleepwalking to Economic Oblivion

This is not a "normal" business cycle adjustment. I have lived through many. This is a 300 year event. In the END GAME it WILL cause a total re-think of the Federal Reserve System and the Fractional Reserve Banking System itself in the economic structure of society. Maybe even by candle light. In the END GAME it will be completely BEYOND BOTH the Keynesian and Austrian Schools of thought. Both views are extremely helpful for analysis but we are facing something beyond Adam Smith, Karl Marx, Thornstein Veblen, John Maynard Keynes, Ludwig Von Mises, Paul Samuelson, and Milton Friedman just to name a few. We are off the charts. We are in economic No Man's Land. I hope somehow we are up to it. Where is the Credit Default Swap 1931 Viennese Credit-Anstalt out there? Where is the financial nuclear weapon detonation out there that is the equivalent of the engines on the Titanic breaking lose at the moment of maximum pitch and falling through watertight door after watertight door taking it under to the depths?

www.youtube.com/watch?...

Why the Stimulus Plan Won't Work

Heyjose011915,

Very good post. All good and valid points. I would only add to your derivatives suggestion that all Credit Default Swaps be limited to the actual couterparties involved in owning and insuring the actual debt instrument. Speculation in these side bets on corporate debt defaults must be declared illegal ASAP by the new incoming administration House and Senate. (There is $1 trillion bet at present on GM going under within 1-5 years!) Either this or the State of New York must lower the boom on Wall Street about these practices by requiring "insurance" reserves by the "insurance" sellers. That will end this real cause of global instability very fast. This whole crisis is about the Credit Default Swaps financial nuclear weapons. It is not about the $300 billion in bad mortgages. Trillions of dollars of liquidity was pre-positioned into the system by Paulson because of the CDS WMD's not the mortgage crisis. The CDS's are financial AIDS and no one knows who is infected because of zero transparency about who has them, the nature of each contractual agreement, and the extent of each bank and hedge funds exposure. The CDS exposures took down Lehman, AIG, and all the rest. The MSM doesn't seem to connect Paulson's actions with this simple truth in the public mind. The whole crisis is as simple as that. When Lehman went down it made it an international crisis. If these instruments are not defused, we will all be Iceland in due time. Therefore, they have to be defused. Send Summers, Rubin, and Geithner in in lead suits starting the day after the Inauguration. One false move and they will all hemorrhage from every pore in their bodies in the financial plutonium they helped create.


On Jan 12 12:59 PM Heyjose01915 wrote:

> Sometime we all think better metaphorically than in real terms-
> Regarding the fiscal stimulus to the individual --" you can lead
> a horse to water but you can't make him drink" [ I wonder if this
> saying was composed by a bright economist?]

Why the Stimulus Plan Won't Work

John,

What is your honest assessment of GWB then and his performance as President of the United States?

What do you feel were his credentials that are better than Obama's?

Thanks!


On Jan 11 01:22 PM John Polomny wrote:

> Interesting to note the amount of positive thumbs up given to posters
> who are in support of government intervention in the economy. I would
> suggest excess involvement in the economy by the government was one
> of the major factors leading to this situation we find ourself in
> today. As far as Barack Obama being brilliant I do not see the evidence.
> Where is the record of success. He was President of the Harvard Law
> Review yet there is no published work? He was a state legislator
> yet from what I can find he was a back bencher. Because of a unique
> situation that occured in Illinois he was able to get elected as
> a US enator. His opponent was Alan Keyes remember. No he is more
> of a Elmer Gantry opprutunist that has been in the right place at
> the right time. Either that or the first affirmative action president.
> He is talking trillion dollar deficits for the next few years. Check
> his math as the deficit over the next year may be closer to $2.5
> to $3 trillion. It will never get there though as the bond market
> or the currency will blow up before that. Obama is as they say on
> the southside of Chicago "pimping" the american people. It wil be
> delicous watching the disappointment set in as he and his sychophants
> try to solve our economic problems with FDR and LBJ solutions which
> cannot and will not work.

Why the Stimulus Plan Won't Work

I am curious. Has anyone here looked at these ideas?

The Human Investment Tax Credit Proposal
www.aesopinstitute.org/

Download this document from the above site:
a_human_investment_tax...

The Remortgage the Nation Proposal
remortgageamerica.blog.../

The comments on this site are quite interesting. Especially those from real estate professionals.

I do not think the full frontal traditional Keynesian tools will work in this crisis nor am I an ideologue on the Austrian School either. This is my general take on Ludwig von Mises and Friedrich Hayek:

www.youtube.com/watch?...

I believe it will take a new hybrid of macro and micro economics in 2009 to address this mess. I feel so far everything we have done is absolutely worthless and Henry Paulson will indeed be crucified in both American and World History. Like the author, I like President Elect Obama very much. I also like that he has apparently enlisted self styled Ivy League Masters of the Universe Summers, Rubin, and Geithner to go out to try to defuse the Credit Default Swaps financial nuclear weapons they helped create. If one goes off and vaporizes them and their reputations in world economic history I feel it is a marvelous karmic end. But it is certainly worth a try to send them in first to be irradiated . The Obama Administration is starting out as a kind of SAW IV movie and I really like that.

Four Opinions on OTC Derivatives

Has anyone written a history of the growth of the OTC derivatives market over the last ten years?

Where did the technical ideology of this market philosophy come from? Which business schools taught this as a viable model?

It would appear to me that historical knowledge of the Panic of 1907 and the Great Depression and the interrelated "margin call" unwinding mechanisms that caused financial nuclear fission in these events would preclude faith in this structure. What am I missing in looking at it this way?

I think Joe Credit Default Swaps pretty much got it right.
www.youtube.com/watch?...

60 Minutes.
www.youtube.com/watch?...

Anyone here want to rebutt this little video?
www.youtube.com/watch?...

The Shallowest Generation

arclight,

Thank your for your service in Vietnam along with James Quinn.

Oops! I see you were born in 1955 so you missed it and James Quinn is even younger than you. People who actually served in the military in that era who lived through that experience see the world a lot different from who you apparently conceive to be the target of your lecture. And I include the anti-war protesters as veterans too. Some of them went to prison for their beliefs. All that came after that era in the rest of the 1970's and the 1980's were never tested by having to face death in their youth. So you have absolutely no right to comment about anything whatsoever. zero. Nada. Zippo. Your over simplifications and sweeping generalizations and indictments along with James Quinn's pontifications actually align both of you with the mindset you are attacking.

You're both getting old brother. Prepare for death.



On Oct 31 10:14 PM arclight wrote:

> All: I'm a baby boomer as well, and I agree with the author all the
> way down to his conclusion.
>
).