Libertad

Proposed Solution for Toxic Assets Plaguing Banks

The real question is "who pays the loss" ?

A large segment of the indebtedness was created by the securitization
segment of the financial industry. Who in their right mind would believe a rating agency stamp of approval on a new "reformed" securitization segment ?

Therefore it is only "inflation" that can re-create valuations.

The point being is that there is no way that "those who do not owe" are not going to pay, whether it be through taxation or inflation.

At the moment, it is not politically possble to just tell the public that this is the inevitability.

Perhaps instead of being upfront, the "emotive public placebo" will be something along the lines of a new label for nationalism such as "The US Bank of The Future Program".

Evidence That Big Inflation Is Coming

This is a rather simple matter....

Monetary velocity, deflation, inflation, money supply, money printing....are all attempts to categorize and quantify future expectations....

The reality is that there is not a true measure readily available that gives the information that is required as to how money will be spent....

A simple example would be Person1....

Person1 has $100,000....

Later on the same $100,000 is reduced in value because the money stock was diluted in value....10x the money was printed....and thus the previous $100,000 becomes 1/10 the value what it was before....

However....if 10% of whatever is available is spent....the economy will be valued as it relates to the 10% spent....

If 20% is spent....then the economy becomes worth more....because 2x the cash is moving to other labels within the economy....

So what matters is 1) what is available 2) what is spent

Futhermore....money either stays or leaves the local economy.....Money leaves to other economies if imports are bought....and stays in the economy if domestic production is bought....

Thus a country can have a depression if no money is spent....regardless
of savings levels....money printing, etc...

Also....if there is very little savings....then the choice of spending is very clear....

Why Did Warren and Hank Invest in Goldman?

Agreed....

Furthermore new business models will arise from Wall Street Past.

Firstly, the world's best companies are becoming more familiar in households, as it should be in a globalized economy.

Accounting will become more boilerplate, as will the legal aspects of floating all securities to any individual in the world, that has a decent connection to the internet.

The real question being why does a relatively intelligent individual that has access to the basic facts of a company need any form of broker?

Direct access technology has given the old turf of specialists and marketmakers to individuals....and anyone should be able to pay no more than 20 cents to transact 100 shares.

Anyone notice that it was largely GS who actually was causal in extremely high oil prices in that they provided the facility to both themselves and hedgefunds with excessive leverage and market means....and when the deleveraging requirements were imposed to become banks...that oil and other commodities were suddenly in a free fall ?

In short....the markets would be better off without the GS and MS's of the world. They are just a large expensive middeman there to game what could be a more honest system. The day should be over, whereby regulations and markets can be gamed...whereby insider is but is not insider information....along with employees in government....

Who needs or wants these conflicts....

Any qualified firm, should be able to walk into any qualified bank....fill out and maintain boiler plate forms.....

Furthermore all securities should be made available worldwide in the currency of choice....in denominations whereby any individual can participate....and information can be available via a Google-Wiki type model.

In short......who needs or wants the old Wall Street in the way of a better and more fair marketplace.

If GS wants to participate in management...they should list on the new exchange a management unit with a base price of $10....In fact there should be no more hedge funds or mutual funds. These "management" units should trade as shares in full view of the public....and readily liquid.

GS, MER, MS, etc are dinosauers.....and should be extinct....

Low Rates, Big Problems

The leverage providers have blown out their accounts....thus leaving it up to the government to grab the baton and keep running....

So the question becomes should they....thus providing the means for the credit providers to build up their accounts for another day in the sun....

Or should prices be allowed to reflect the sudden withdrawal of credit.

Progress in the past 20 years plus relied heavily on increasing credit which in turn made higher prices possible.....

No one said that risk was not present.....Risk means that prices change and thus markets exist....

The governemnt should stay out of markets and in fact become a much smaller part of the total marketplace...

Structural changes such as a 10% consumption tax only....and a new world wide exchange that is more available to individuals not just the gamers of the system such as a Goldman Sachs....would put additional tools in the tool box that could augment prices in a real marketplace way....

The government needs to be drastically reduced commensurate with the recent drastic reduction in the economy.....

41st Worst Monthly Jobs Report on Record... Yes 41st

Higher leverage implies higher sensitivity....particu... with overall valuations....ie a 1 percent move on a nonlevered account....versus a levered account.....This has to be included in the viewpoint....


On Dec 06 05:59 PM HaavBline wrote:

> Yes, percentage drop is what really counts, and it is good to put
> this data is the right perspective.
>
> However, a check at the dates of the fourty worse job reports also
> reveals an important fact: The lastest one happened 28 years ago
> at 05/80 when there is a 0.48% drop.
>
> Thinking from another angle, does this mean its only a early warning
> and much worst job reports are possibly and probably still ahead?
>
>