BRUCE E. W.

Dear Fed: The Problem is Solvency, Not Liquidity

Perhaps the Fed should do something tailored to the contemporary issues instead of the 1920s.
A selected variable set of interest rates directed at different segments of finance might be a consideration. Why should the rate of borrowing to refinance a bad debt be the same as the rate to build a new office building or add to a constructive infrastructure? If debt rates were differentially programed for the desired effect , everything from residential and commercial neccessities to a full gamut of "less vital" essentials (increasing debt...pure speculation) could be graded. Why can't the "cost" of money be ajusted to be a market itself!
This is the innovative fiat capital of the world. Why can't we have a differential "smart rated" differential interest rate for selected sectors? Obviously "universally cheap" money is not going where we want it, so why not mark the bills and follw the money?

Dear Fed: The Problem is Solvency, Not Liquidity

When the health of the US economy is equated through the central currency flow of either Wall Street or Big Banks it tends to read the corrections as one dimensional equations reinforced by market logic. If the complexity of a "unified field theory" for the sectioned; segmented; inverted; reverted; stratified; factioned and fractioned, and then still fragmented into reactionary and counter-reactionary activities in cross-sectional and interdependent "markets" were truly possible; it is doubtful that you could just throw money at it to solve its impingements, excesses or gridlocks with a simple flow chart writ large.
Isn't it quite possible that when a system of fiat currency has been so disjointed it can have dillution problems with liquidity crisis at one or several interacting levels, while it has counterproductive constriction and interdependent solvency problems interacting at other spectrums of essentail economic segments? Until we begin to assess a comprehensive and interactive vertical WITHOUT a DIRECTIONAL BIAS (up/down demand / supply) along with interactive factors from horizontal measures,... these "classic economic terms" for banking and finance do more to "razzle & dazzle" than actually provide handles on a healthy correction for a stable All American Economy (let alone a model for a Global base and reserve). Perhaps worse, they just keep pushing us from one end of "WRONG" to the other!

The Fed and Fannie Mae: Throwing Money Down a Black Hole

vanityfair.com/pol... Quote:

"Many believe the government-backed mortgage giants known as Fannie Mae and Freddie Mac were major culprits in the economic meltdown. But, for decades, Fannie Mae had been under siege from powerful enemies, who resented its privileged status, its hard-driving C.E.O.’s, and its huge profits. Surveying Fannie’s deeply dysfunctional relationships with Congress, the White House, and Wall Street, the author tells of the long, vicious war—involving most of Washington’s top players—that helped propel one of the world’s most successful companies off a cliff."
by Bethany McLean February 2009

Ultimately the CREDIBILITY of the US Government and its ability of its trustees to ASSURE THE WORLD that it will, under all circumstances, STAND BY ITS WORD to back these GSEs is the critical question that will stand the test of time in this charade of vested interests. While 80% of all the bailout capitalization (plus the actual currency being pumped into the economy) has been going to the Financial Service sectors, a disproportionate focus remains levied against the GSEs and their holdings. Who stands to gain? Certainly the taxpayer is going to end up paying no matter what!

The Vanity Fair article cited above suggests that the corruptions and distortions are more to do with the private sector's interests over the past decades than with the actual failure of the GSEs. Now the Vultures want it all and they scream about taxpayers money; but not about traxpayer's homes and mortgage security itself.

Unemployment Claims: Watch the Distortions

The bottom 80% is not only suffering the unemployment but savings are dwindling, debt is up, forclosures and individual bankcruptcies are accellerating while the big money gets to buyout all these asset losses in stride. Meanwhile the upper tiers of the economy (micro & macro) are floating price structures against speculations into another counterbalancing set of spirals (the race upward seems to be equal to the race to the bottom). While the finance at the top is expanding the lower half is contracting into an austerity trap.
Thanks for the truth in spending eye opener, it seems most of the "virtual reality of news" these days is meant to sway the market sentiments from feel good to fearful doom and back again like the wind to suit the market makers' bosses.

World Bank, IMF Speak Out Against Developing World Asset Bubbles

Price theory in real time serves only one sector at the cost of another. The stratfied macro-economy is being dissected and micro-segmented with float values at the top (hoarding and competing simultaneously) and all constriction at the other 80% with cost ratios at a loss and basic dimminishing returns as a rule against the real asset value. The distribution of finance and credit is all in one direction and the sellout and shorting is not going into the infrastructure as a whole. Pretty soon se will be eating the price and not much else.

The Roots of the Coming Crash

The expansions at the top is based upon monetarizing the debt and easing the float into a relative equilibrium, but the theory of price structuring is at constant odds with the balances. Unparalleled deleveraging and the multiplier process is amplified under deregulation and the phantom expansion of derivitive inflation is taking up the slack while it might be said that all the "constriction" is stratified at the bottom 80% of the demographic economy and tightening fast.
Overall we are experiencing the restructuring of class warfare at "star wars" financial sector levels from the stratisphere and perhaps offshore cannon fire. Thank you Milton Friedman , Mr. Reagon and all your crony friends en league!

On Russia, Sovereign Debt Defaults and Fiat Currency

They seem to have cut the links to my post. In efect they represent one regional crisis after another since the 1970s which follow the same pattern of default and reorganization in both monetary finance and political agency. In effect, they represent a "star wars" scenario of interregional crisis by finance over the past 40 years.

On Russia, Sovereign Debt Defaults and Fiat Currency

(1) en.wikipedia.org/wiki/...
en.wikipedia.org/wiki/... (1998)

en.wikipedia.org/wiki/...

en.wikipedia.org/wiki/... (1970s -1980s)

en.wikipedia.org/wiki/... (1994)

en.wikipedia.org/wiki/...

bilderberg.org/bis...

en.wikipedia.org/wiki/...

A man of your intelligence and experience should open the scope of your perspective to the wider implications of history. If the world were a "business" I would want you very high up in its organization chart. However, the world is a patterned power scala of leveraged domination and political capture in history. We can not escape the realities of the post "cold war" economic war in balanced power detante; converting back to a class capture of currency domination and its consequences now that the nationalistic agenda is accomplished and the world is more or less being capitalized and in fact captured as a marketed interregional and cross bordered grid.

Privitizing this capture of political economic agency (or the economy of politicizing power, if you will) will be the result of a pure monetarianist system simply by aggressive exclusion and a politicized (policed) reinforcement/ enforcement.

Price theory can not move in two directions. Price theory will stratify society permitting liquidity in a progressively smaller power elite, while constricting currency in the vast majority of the economic demographics. This is not GOING TO happen, it is happening right now.

Excerpt from:
Theft of the Century
Privatization and the Looting of Russia
An Interview with Paul Klebnikov
Jan/Feb 2002 - VOLUME 23 - NUMBER 1 & 2


Paul Klebnikov is author of Godfather of the Kremlin: Boris Berezovsky and the Looting of Russia. He is a senior editor at Forbes magazine and has reported from Russia since 1989. A fluent Russian speaker, he has won four press awards for his writing on Russian business. He holds a Ph.D. in Russian history from the London School of Economics.

"The vast majority of the Russian population got nothing out of the voucher privatization. The people who did benefit ó the insiders and financial operators who bought up all the vouchers ó ended up buying up control of the main enterprises at a fraction of their market value."
Paul Klebnikov: "The idea was that, since the vast majority of industrial assets in Russia were state-owned and hence every citizen had an equal piece of those assets, the vouchers [giving each citizen a proportionate stake in privatizing assets] would be the vehicle by which the state would promote equality in share ownership of those state-owned assets. On the face of it, it’s a very noble idea. Theoretically, it could create a kind of Jeffersonian broad-based middle class of small property owners, who, in turn, would be the foundation for a democratic Russia."

It all went terribly wrong

Up until now it may well be the greatest theft of the last century, but if this happens to the American economy; it will have only been a practice run rehersal for the largest global scheme in the history of all mankind.
At least consider the implications of Naomi Klein's The Shock Doctrine, 2007 Picador, Henry Holt & Co.;
I am also recommending Ellen Hodgson Brown, J.D. ; The Web of Debt, 2008 Third Millennium Press
I assure you that once you start to look...you will not hesitate to listen attentively to current affairs.

Fannie Mae Plus Goldman Plus Tax Credits Plus U.S. Treasury Add Up to Big Mess

GS and GSEs are quite similar these days. They're both gov. backed so why the slant against an underserved market that was actually designed to help people establish themselves? There isn't really any difference between the government backed financial service sector that failed and was bailed out; in principle. What hypocracy!

Unresolved Financial Troubles: Three More Warning Shots

People like to say that the "lost decade" for the Asian Economic Crisis was due to this theory or that one; claiming their own bias. The Japanese, however, claim that they begged the world community to halt the short selling of their Yen which was mechanically exploited in the carry trading markets. They claimed it subverted every surge of recovery as the Yen got stronger it would be brought right back down by global currency trading in shark infested waters; feeding frenzyon the Yen.
I can't find the link but I read a warning well before Roubini wrote his analysis ft.com/cms/s/0/9a5...
(in fact it was still 2008 by a currency trader) that warned of this happening to the dollar with global consequences and repercussions that were unmeasurable. Unfortunately, the world community did not seem to have the will to intercede in the Japanese predicament (the Japanese are resentful and rightfully so). While the gloom and doom on the market is potentially a bit of a herd hysteria (along with hunters and scavengers standing by), the dire warnings about shorting the dollar is not a passing gust of wind. As Jim Morrison might have sang:
This is the End...and this is no impartial jury. Since the entire currency is a fiction float, if you pop this bubble...

If Goldman Is Selling, Are You Buying?

online.wsj.com/article...
Goldman wants Fannie's credits.

www.mcclatchydc.com/22...
Goldman takes on new role: taking away people's homes

www.mcclatchydc.com/go.../ web video

www.mcclatchydc.com/22...
How Goldman secretly bet on the U.S. housing crash

Ticking Prime Bomb: Fannie Mae Monthly Summary, September 2009

online.wsj.com/article...
Goldman wants Fannie's credits.

www.mcclatchydc.com/22...
Goldman takes on new role: taking away people's homes

www.mcclatchydc.com/go.../ web video

www.mcclatchydc.com/22...
How Goldman secretly bet on the U.S. housing crash

by Greg Gordon | McClatchy Newspapers 11/1/09
"The Securities and Exchange Commission should be very interested in any financial company that secretly decides a financial product is a loser and then goes out and actively markets that product or very similar products to unsuspecting customers without disclosing its true opinion," said Laurence Kotlikoff, a Boston University economics professor who's proposed a massive overhaul of the nation's banks. "This is fraud and should be prosecuted."

As early as 1990 the American Enterprise Inst. was calling for the liquidation of FNM & FRE (GSEs: Government Supported Enterprise) as part of the deregulatory and privitizing process they were pushing. At that time the idea was initiated that a "downpayment" support would replace the extended mortgage servicing and after the initial downpayment the mortgages would be shifted into a National Mortgage Market. In Sept 2008 the SHADOW FINANCE REGULATORY COMMITTEE which is essentially a working team created by the AEI made a direct recomendation with Paulson that they should take "the opportunity" of the crisis to initiate that liquidation process. Now we stand today discussing how these GSEs are threatening the American economy which falls directly into the path of a schema to invade and capture that market. I just feel cynical enough to wonder what incentives exist to short FNM and FRE and bring down the house. And why is it that the big money keeps so close behind these reports? Trends and statistics and roller coaster graphics? It must be the end of the world!

Bear Market Rallies and Lessons of History

www.bilderberg.org/bis... (fascinating link)
Introduction This was written in 2001 and the full spectrum was spelled out from derivitives to subprime. The entire crisis was completely spelled out by an honest actuary doing his job.
Basic outline:
Background to Development of Basel Capital Accord
Overview of the Basel Capital Accord (BCA)
Problems with the new BCA from Public Interest Perspective
Trends in Bank Supervision (esp. Gramm-Leach-Blily)
Global Financial Consolidation and "Too-Big-to-Fail" Risks
Addressing Causes of Financial Crises
Credit Creation for Low/Middle Income Groups and Predatory Lending
Non-Bank Financial Institutions
Need for Public Input
In another really well researched and comprehensive work:
webofdebt.com from Ellen Hodgson Brown, J.D. provides original research work on the money system. You never see this in the mechanical workings of the big market machinery, but on p.143-144 of Hodgson Brown's work she lays out a rationale as to why the currency was contracted in 1929 with a resulting liquidity freeze. It is too detailed to explain here but suffice it to say that at that time the gold standard was very much involved in the dramatic decline, since a run on gold assets depleted the reserves that the currency was built upon, further shrinking the money supply. This is, obviously a distinctively inverse relationship to the situation today. The high profile and desireability of gold however, is none the less in the air.
In fact though, to add to the distinction it might be noted that the U.S. was attempting to manage down the highly "inflated dollar" at the time and the moves were quite deliberate with some inside wealth being informed prior to the strong actions being taken.
What is at least as fascinating is that Hodgson Brown goes on to note
that the "big Banks" and the "Big Money" made out made out very well when they came back into the market and bought up the distress priced stock and buying up companies for pennies on the dollar; along with mortgages from family homes and farms that were delivered to the hands of bankers and the financial elite.

In this regard I would say that the mechanism and the operational arrangements of the economic capital has been interpolated in the contemporary setting. However, these meta-trends in manipulation and intentionality fall between the micro and the macro frameworks of textbook economics because they are intertwined. What is striking in Hodgson Brown's assessment of the consequences was that just as today, the International Bankers and big money made out while everyone else paid the price. Perhaps this parasitic drain was what prolonged the suffering until the war effort came along to level it. Her most intriguing Line: "It was dramatic evidence of the dangers of delegating the power to control money supply to a single autocratic hand of an autonomous agency."

So it is possible to propose that there were so many actual oipposite contingencies between 1929 and today that, in fact they were only united by one common ailment.
excess power in too few hands pulling the strings for too few against the interests of so very many whom were led to the fleecing by believing the machine was simply an impartial market.
Ellen Hodgson Brown;
THE WEB OF DEBT: The Shocking Truth About our Money System and How We Can Break Free. 2008 Millennium Press, Baton Rouge, Louisiana. USA 800 891 0390

Q4 Outlook: Real Life Stress Tests Begin

It is beginning to appear that handling banks one at a time is a system of attrition that will only serve scavenger interests and bonanza seeking private equities. There should be some better way to set up assorted levels of banking coallitions from mid range regional pools to work ou alternative potentials. It could be feasible that a struggling bank might be simply cut into divisions and merged into a team of banks to manage jointly.
I suppose there are many healthy mid-range banks that would be interested in expanding by joint venture into a market share by accepting a manageable proportion of toxic junk to process.
It just doesn't make sense that after all this year, there has been no experiences to alter the fate and rate of approaching these banks. This idea of just let them straggle along till they fail does not seem like the cheapest or the best approach in the long run.

Bear Market Rallies and Lessons of History

PLAY IT AGAIN SAM!!!


On Nov 01 11:05 AM sam131 wrote:

> We have a couple days of selling...and all the doom sayers are all
> over the place ....
> this Bullmarket is alive and kicking.....We were waiting for this
> pullback beginning october..which it did but only to Dow 9500....the
> following rally was suspicious to begin with...and here we are ...looks
> like this time we'll have the real pullback from the summerrally...expect
> this week to have a little relive rally ...another selloff next week
> ...low most likely at or around dow 9400....than fasten your seatbelts
> gentleman.....best six month of the year coming ....Dow 11600 should
> be peak ......after that we should have our real correction ( wave
> 6 ) ......looking forward reading all the doomsayers comments already
> ......