Posted on 09/18/2008 6:42:19 PM PDT by Reagan80
Watch that video.
Watch it twice, three times if you have to. Go look at the other video, and the other Ticker referenced in there.
Now understand that there is no solution to this fast and vicious destruction of America's financial markets and financial companies until and unless the lying stops.
It has NOT stopped and in fact has gotten materially worse.
Folks, this meltdown will not stop until either:
ALL financials mark everything to the market, ALL OTC derivatives are traded on an exchange or declared void, and ALL balance sheets are transparent so we can determine who is broke and who is not. OR
The market has completely imploded with every financial stock worth zero as the hedge funds and others short each in turn into the ground, forcing each to be bailed out in turn. Those are the ONLY TWO CHOICES.
(Excerpt) Read more at market-ticker.denninger.net ...
Reagan80
Serious butt-kicking needs to be done and then some serious legislation needs to be passes and money allocated for its enforcement.
The Dems because of ideology and the Republicans because of a lack of guts have let the attitude that all this is to complicated for the people to understand so we should just let the experts handle it dominate. They thought that with huge piles of loot hanging around with inadequate controls they still wouldn't have any problems with peculation. Whatta bunch of maroons!
The guy in the video says that the Fed was $40B short of meeting the $85B “loan” for AIG, and so they printed about $40B in “special treasury” notes. Is there any truth to this? Sheesh...freakin Monopoly Money!
Make it sound like the Crash of '29 and people start thinking we need another FDR?
Yes; that’s why Congress members were ‘angry’ yesterday. Paulson treaded directly on their territory. Instead of using funds from the Federal Reserve’s balance sheet (they could not, the Fed is also depleted after exchanging it’s ‘good assets’ for bad paper in prior bailouts this month)...Paulson filled the gap by “printing” more paper directly.
Deficit spending is ordinarily Congress’ turf. He has gone around them - he has gone around everyone. The Congress critters are unhappy that this much new (and bad) debt is being taken on to the Federal balance sheet outside of their control...THEY were planning to spend that money to get reelected...
It’s a great rant, that’s for sure. He’s not saying Great Depression II is a certainty; he’s begging for the fraudulent balance sheets to stop; and for Paulson and Bernanke to stop covering up fraudulently valued assets by repeated bailouts at the taxpayers expense - or GD II could happen...
I’d say he’s a patriot...
I know that this question will be somewhat an oversimplification, but am I correct in saying that essentially over this past weekend, we as a nation were made financially bankrupt? It seems so.
The U.S. has been bankrupt for quite some time. The $10 Trillion “national debt” only represents the total ‘cash out’ in excess of ‘cash in’ from 1789 to now. Add in the promises of future Social Security, Medicare, etc., and estimates run as high as $100 Trillion or more.
The issue Karl Denninger raises is whether the rest of the world is about to cut off the funds. If the Fed cannot “rollover” each week’s expiring Treasury Bills and Notes PLUS $1 to $2 Billion PER DAY; that’s called a Default...See Russia and Mexico in the ‘90’s; Argentina in the ‘80’s, and Germany in 1933.
I don’t know who he is but his message is loud and clear.
I am truly afraid that is precisely what WILL happen.
China, Russia and Arabs own WAY TOO MUCH of our debt.
God help us all.
I agree with a lot of what Denniger is saying. However, if today is any guide, the rest of the world still seems more than happy to fleee to the “safety” of our debt. I thought I heard that at one point today, yields on short term T-bills were actually negative. That means institutions are willing to lose $$ in the short term in order to preserve it.
I do think this obsession with liquidity is like a junkie’s obsession with heroin. Apparently, no one in Congress has the backbone to stand up to these guys (Bernake, Paulson) and say enough! They are flooding the system with $$ to get another dead cat bounce that will keep the lid on things through the Election. After 4 Nov, look for all Hell to break loose.
This is what Ron Paul has warned us about for years.
Wow good find.
Yes; yesterday morning, short-term Treasuries were selling to yield at 0.02%; I believe you that they may have dipped into negative yield (buyers were paying an amount that exceeded both the face amount PLUS the total interest to maturity) just to have a place outside the stock market to place cash.
The way this is spiraling out of control, I’m not sure they can contain it for 7 more weeks.
I have to admit that most of this securities trading - CDS, short selling, puts, ... is pretty foreign to me. After some reading this evening, I think I understand his concerns. Seems like some of the nations that hold our debt share them. It also looks like his predictions for Morgan Stanley and Goldman Sachs might be starting. I saw this from AP
Cox told the lawmakers the SEC may order a temporary emergency ban on all short-selling -- not just the aggressive forms it already has targeted, according to a person familiar with the matter.Denninger predicted this move and that it would not be totally successful because someone targeting MS or GS stock could just issue a bunch of "puts." Time will tell.
Denninger is correct about one thing: the Weimar Republic, Argentina, and Zimbabwe did not do well trying to "print" their way out of a financial crisis. Even Scott Adams. who draws "Dilbert" seemed to have that on his mind lately (The Elbonians...)
Ping for later.
Why couldn’t AIG fail? If I had AIG car insurance, so what? I switch to Geico. Berkshire Hathaway (which owns Geico) and Allstate and others then benefit tremendously. Many of AIG employees who are laid off will be sought out by the other companies to take on the additional workload. Some will not get jobs. But the cost of their unemployment insurance is dwarfed by the $85 billion morass created to save AIG.
I actually feel sorry for the chumps who bought our debt. We are deadbeats. And we have allowed the criminals in Washington to destroy our great nation and bring us to this point.
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