Hoarding ammo at the Alamo
by Pavel C., Unknown News
October 21, 2007 |
There is a Wall Street saying that applies to the
Bush Regime's leadership, especially with respect
to the credit/mortgage bubble crisis: "Don't stay
wrong for too long!"
That is another way of saying to cut losses short
before they grow larger -- to admit to errors quickly
so
that change can be initiated.
As long as one's
emotional, mental and financial reserves are tied
up it is impossible to change course, for a
multitude of reasons, not the least of which is
psychological. As long as the person or institution
is wallowing in Denial and refusing to Accept the
facts, refusing to admit that reality is real, that
the truth is true, how can new enterprises be built
to prosper?
Worse, who will entrust the Denier In
Chief to lead the way into the future when he and
his cohort of ass-clowns are busy marching us over
the edge of a cliff?
It is hard to admit to certain types of errors. For
example, stock investments are notoriously
difficult to exit psychologically; an entire
generation of people has been trained, Pavlov
Style, that stocks always go up in the long run.
Dealing with the credit/mortgage bubble crisis is
even worse because Acceptance would require
allowing failures to fail, instead of bailing them
out...and then many stocks would go down all the
way to zero.
But the Bush Regime can no more admit to these
problems than they can admit to any
other of their numerous mistakes. The Bush Regime does not believe in "free markets"
any more than they believe in freedom or human
rights for all mankind. They
believe in government bailouts when losses happen,
and private profits in boom times. Their "free
market" mantra has no basis in reality.
If they allowed
the free markets to work they would be exposed,
again, as incompetent bunglers of the first order.
If the "free market" were allowed to run amok in
the American financial system, the result would stun
average Americans -- and then provoke them to
demand Regime Change. The U.S. financial and
economic system, including the Federal Reserve and
the U.S. Treasury amounts to the most gigantic
Ponzi Scheme in the history of the planet (not
even considering the Social Security "trust fund".
In fact, whatever the Bush Regime says,
you know that almost certainly the exact opposite
is totally true. If they say (every month) that
they want a strong U.S. dollar, then that means
they want a weak U.S. dollar. If they say they want
the free markets to work then that means they are
giving their friends and associates hundreds of
billions of dollars to socialize their losses --
letting average Americans go bust is camouflage for
their schemes.
And so on, and so on.
For us average Americans, the shit is going down
now, while Friends of Bush are preparing to receive
their Medals of Freedom from the president.
I can't
predict the short term, like next week or next
month, but hoarding cash at this point seems a lot
like hoarding ammo at The Alamo -- sure, keep one
bullet for yourself, but there is no point in
conserving the rest.
For the Bush Regime must, out
of necessity for themselves and Wall Street,
attempt to reinflate "the system" by devaluing the
dollar, lowering interest rates even more, and by
freely handing out money to save the bankers'
asses. At least a trillion dollars
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The Bush Regime does not believe in "free markets"
any more than they believe in freedom or human
rights for all mankind.
They
believe in government bailouts when losses happen,
and private profits in boom times.
Their "free
market" mantra has no basis in reality.
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The turning away?
by Max Fraad Wolff, Prudent Bear
Excerpt: America has been selling its future household earnings, profits and tax receipts at a rapid and accelerating clip. Starting in August, the rest of the world's appetite for our future seems to have diminished. Gee whiz, what could possibly explain that?
Well, all those future revenues are US Dollar revenues and the US dollar has been doing rather poorly of late. This does not help.
We live in a magical nation where taxes are cut routinely but spending grows. The last 6 years have seen this long simmering problem flare up. The government revenue story has been defined by massive tax cuts and surging spending. This may rile some buyers.
There seems to be some indication that American homeowners are and will continue to have trouble repaying some of the mortgage borrowing they have done. Thus, the currency in which foreign nationals will be paid is in decline.
At the same time the certainty of repayment is in greater question than many had expected. America's future looks less bright to some foreign asset buyers. Here American investors agree with foreign investors. The Net Purchase of foreign securities by Americans has been rising very rapidly since 2004. ... |
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Respite's over
by Doug Noland, Prudent Bear
Excerpt: It is today's inescapable Credit Bubble Dilemma that enormous quantities of new Credit must be forthcoming -- which entails intermediating Credits that are at this stage highly risky. For one, they're of high risk because the Credit system is proceeding toward a major dislocation -- one with major ramifications for the entire economic system. The flow of finance will be altered profoundly, and many individuals, market operators, business enterprises, and (local, state, and federal) governments will be forced to adjust. This will amount to a momentous financial and economic adjustment and we should not expect it will proceed smoothly.
In the meantime, there is today apparently no alternative than massive banking system inflation. In just 12 weeks, bank Credit has ballooned $360bn. And as much as the unfolding mortgage debacle will impair the banking system, I fear it has already irreparably damaged "Wall Street finance." If upper-end jumbo, alt-A and home equity loans are the looming disaster that I suspect (significantly larger in scope than subprime), the viability of the CDO and mortgage derivatives markets may soon be in doubt. The terrible earnings news this week from the mortgage insurers plays right into this debacle. If confidence falters in the GSE. And the melt-up in Treasury prices only exacerbates MBS instability, while the (not so quiet) run on the dollar further reduces the appeal of U.S. mortgage paper to our foreign Creditors. |
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has or will "go
bye-bye" from the U.S. Treasury just for the
mortgage bail-outs, and it may end up at two -- or
more if The End Of The World As We Know It occurs.
© by the author.
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