VANITY - Soros' Economic Terrorism

I worry about the mortgage on the house. By the time you throw in property tax and insurance it’s a big chunk. My husband is a pastor so if people don’t have money to give there just won’t be much.

We’re trying to decide whether to send 2 of our kids on a high school band trip to Florida. $1000 apiece plus food for 5 days. Somebody in the community felt bad that our kids didn’t sign up immediately because we didn’t know whether we could swing it financially (they were the only kids who abstained), so they anonymously offered to pitch in some. I talked with my CPA sister-in-law over the weekend about what happens if the child tax credit is allowed to expire. With 4 kids, those “little” decisions the government makes have the ability to throw us for a loop. And car repairs have emptied us out this year.

We only have the kids in the house for a few more years so it’s gut-wrenching to make decisions when everything seems so precarious.

Would you say that what Congress has been doing to try to “fix” the economy and get us to solid ground has actually exacerbated the problems?

Why do you think Bush was so scared that the entire world economy was going to collapse if we didn’t pass TARP? In comparison with the entire world economy, TARP was so small. Who would it give confidence to? Would it stop either short-term or long-term “jiggles” in the market? And what good would it do to get rid of “toxic assets” for the banks, if the derivatives are the same thing times 2 or 3 and all over the place?

Congress has made things worse because they are not addressing our core economic problems. Instead, they continue to borrow and spend with abandon, while kicking all of the debt cans down the road. The problem is: one day soon, the cans will all be too large to kick any more.

As to "toxic" bank-owned assets, there is a negligible chance of many of them ever performing again so as to justify their current make-believe valuations. That leaves two choices: one bad and one worse. Continuing to allow banks to maintain essentially fictitious assets will not end well, eventually, they will fail disastrously and even spectacularly. Forcing a "mark-to-market" accounting would create an instant market collapse - but one that in the long-term, would produce a sounder base upon which to re-establish stable growth. Frankly, it's going to suck either way.

Derivatives are another concern, although many derivatives are good and necessary things that actually help stabilize markets. The real problem is more one of excessive leverage rather than indirect valuation. This is where computerized trading program algorithms have exacerbated a problem they were intended to solve: how to achieve predictability of prices in various assets classes over time.

By using micro-timed options purchases and sales in geometric patterns, I would argue that the market has actually become more volatile, as it is increasingly divorced from the kind of human decision-making and value judgments that once governed a stable system. The market is instead now more dependent upon hyper-mechanized "pulse" trades that - if synchronized in the wrong way at the wrong time - could explode in a way that no "Plunge Protection Team" could ever stop.

It is difficult to quickly synthesize the issues involved without over-generalizing the way our financial markets work. But in a nutshell, what seems to have happened lately is that traditional investors are largely absent from the stock market. They're spooked - maybe permanently. The after-inflation rate of return from equity investments (stocks) during the past ten years has been awful, and the volatility has put a lot of people off.

A lot of the value in the market is controlled by institutional investors - huge financial service companies (including banks, since the late 90s) with sizable positions held in mutual funds. Many mutual fund managers have also been hesitant to do a lot of trading (typically reserving their activities to end-of-month and quarterly re-balancing) for the same reason as the little guy.

Much of the daily activity in the stock market is the work of global hedge funds and investment banks like Goldman Sachs. In the past couple of years, they have focused on low-priced stocks like Citicorp and Bank of America, where small price moves can yield big percentage gains quickly. They also use ETF's (exchange-traded funds) - a derivative instrument that provides ownership shares in entire markets or assets classes (such as SPY - a "proxy" for the S&P 500 index).

Hedge funds also use high-frequency trading programs that generate option trades (put and calls) at a dizzying speed (microseconds) and according to algorithmic patterns meant to reflect normalized price/volume relationships. The "flash crash" of few months back was likely triggered by these machinations as they collided in an unforeseen manner. A more important matter here may be whether these purchases and sales are ever actually executed at various times or rather used to "move" the market in a direction that allows for subsequent trades to be more profitable. That would be illegal.

Again, I apologize for not being able to fully explain all of these concepts in the limited time and space available here, which likely means I've misstated something or not adequately explained the complexity of the relationships involved. We haven't even touched on debt instruments (bonds) - and what the Fed is doing with them, which is a whole other giant can of worms...

I’ve been reading the responses to your questions about Soros and the Sept 2008 Crash.

The way to ‘innoculte’ ourselves is to return to the form of government originally intended by our founders.

No unconstitutional Departments such as Agriculture or Education. No programs such as EPA or HUD. And we should abolish the IRS and repeal the 16th Amendment.

Right now lobbyists are paid huge sums for trying to get special treatment via the tax code for their clients. Making states responsible for collecting taxes, for State and Federal operations, will eliminate most corruption on the Federal level.

Every state in the Union collects taxes of some sort. Our citizens are presently sending tax revenues to the Federal Government, which turns around and sends money back the States. That isn’t just stupid; it is costing us billions of dollars just to operate the IRS! Instead of the IRS having to deal with millions of taxpayers, the Feds will be dealing with, hopefully, less than 100 different sources of revenue.

We can eliminate much of the expense of Federal operations by having the States pay Uncle Sam their allottment for constitutionally-mandated Federal activities, such as the common defense. Let the States decide whether they want to fund welfare, citizen’s medical care, or environmental programs.

By returning power to the several states, and reducing the size and extent of the national government, we can go a long way towards reducing the national deficit. Power on a state level, particularly when the states control THEIR spending habits due to input by citizens, means that local communities have a greater say in how tax revenues are spent.

As for Soros, he is a criminal and should be dealt with pronto.

Sounds good to me.

The sense that I’m getting is that there’s not really a short-term way to protect ourselves. The way to protect ourselves is by sound foundations, which we don’t have right now.

Seems like the Cloward-Piven Plan has put us in such a precarious position that we just about have to collapse and start over if we want to ever be stable again. Unless we’re willing to take the fall there’s no direction but down.

Does it seem like I’m hearing right?

“Seems like the Cloward-Piven Plan has put us in such a precarious position that we just about have to collapse... take the fall...”

“Does it seem like I’m hearing right?”

Yes and no.

I suspect the Progressives and Globalist one-world government types would like us to take the collapse. That way they could muscle-in and take over the United States.

Meanwhile Hezbollah is gathering along the southern border, in cahoots with the Narco cartels. Jihadists here are feeling emboldened by the Muslim in the White House. They don’t know this country well at all and certainly Obama doesn’t know it either. Most folks here don’t remember or know how popular the Fascist movement was in the U.S.A. during the 1930s, and how its popularity literally evaporated after the Pearl Harbor attack and Hitler declared war against us. Foreigners are always thinking we’re about to blow apart at the seams due to how much we Americans love to politically squabble! Huh, are they stupid or what.

Americans are going to be surprised when those people make their moves, as Obama will not defend this nation against Muslims, foreign or domestic. Remember — he’ll hang with the Muslims...but like I told you on another thread, it will not work. They think they’re cunning and have us surrounded, the poor bastards.

We have 300Million people with 200Million guns and most know how to fight a guerilla war, especially on our own territory.

Now, I’m not saying it will get to that point but Obama is finding the space between a rock and hard place getting narrower every day.

As to the financial collapse, those folks who’ve been storing food and collecting silver (gold too, though it will be harder to circulate) will most like do best. Those who rely on government checks will be desperate. Hopefully, the economic crisis won’t go on for too long but other nations have survived such collapses, so I know we can too.

The problem is keeping the Global opportunits at bay. Iceland did, I’m sure we can too. See the link:

http://www.wikileaks.org/wiki/Iceland_says_NO_to_Debt-Slavery

If Soros and Obama hesitate, don’t take the gamble and hold off, it gives us time to elect a responsible group of Conservatives who will clean up the governmental and economic mess. But that won’t happen if the RINOs aren’t kicked out of office — they are owned by the Globalists.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.