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The Emperor Has No Clothes; Nor apparently do his financial advisers
The rest of us pay our bills as they come due. Government bills have been coming due and going unpaid.
How did we get here behind the eight ball? We trusted elected representatives and their appointments who promised to preserve, protect and defend our Constitution. They did not.
Can we really trust the people who let AIG, Citigroup, Fannie Mae and Freddie Mac go down the trash chute and then demanded taxpayer bailouts?
In plain language, Wall Street Banker greed, using dangerous deficit derivatives dwarfing the world economy, broke the big banks.
These Bank leaders and their government lobbyists repealed the Glass Steagall Act of 1933, refused regulation of their off balance sheet derivatives, eliminated protective 10% Net Capital, Uptick and Naked Short Rules to create casino gambling with our future.
They used leverage and off balance sheet derivatives worth more than twenty times the world economy to seek more and more profits. Now they try to cover their mistakes eliminating mark to market accounting, which only delays the inevitable.
Just as trees do not grow to the sky, unbridled usury eventually exceeds the capacity of the economy to service it. According to the Comptroller of the Currency, the top six US banks hold 96% of the derivatives and 81% of the credit default risk. To hell with them.
We saw defaulting debt derivatives take out AIG, Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers, Merrill Lynch, Wachovia, WaMu, some of these firms more than a century old. And now the top six surviving US banks say they are too big to fail. Not.
Since informed private investors do not want their toxic assets, the President’s advisors came up with Five Year plans modeled on the Resolution Trust Corporation, plus Hoover and FDR government bailout Great Plans.
As mentioned, we are way too early on the default curve. They are putting taxpayers and the economy at even graver risk by removing credit and liquidity from consumers and putting their families on the hook for the majority of the risk. They say they worry about inflation when the risk is deflation.
An oft uncited fact of the RTC is that taxpayers eventually paid off 77% of the monopoly media Heralded Public-Private RTC Partnership after the likes of Neil Bush, the Clintons and the Cayman Island Crowd broke Silverado, Madison and other S&Ls during Bush Senior’s term. Then we were dealing with hundreds of billions, a much smaller portion of the economy than the tens of trillions or hundreds of trillions claimed to bail out America or the World now.
