Paulson: Government Crafting Plan to Rescue Banks From Bad Debts

You are just trying to be funny- Right?

No, but he has an amateur idiot helicopter Ben running the Fed. A Wall Street whore Paulson who didn’t see a Wall Street bail out he didn’t like. It was bad enough that Bush gave us the massive drug benefit liability. Now lets just pile on trillions of mortgage liabilities.

Bush could have said no. Tell the Wall Street sharks and cons to hang themselves and leave the US taxpayer alone. He had a choice and he chose fascism.

*snip*

“A.I.G. does business with virtually every financial institution in the world.

Most important, it is a central player in the unregulated, Brobdingnagian credit default swap market that is reported to be at least $60 trillion in size.

Nobody knows this market’s real size, or who owes what to whom, because there is no central clearinghouse or regulator for it. Credit default swaps are a type of credit insurance contract in which one party pays another party to protect it from the risk of default on a particular debt instrument. If that debt instrument (a bond, a bank loan, a mortgage) defaults, the insurer compensates the insured for his loss.

The insurer (which could be a bank, an investment bank or a hedge fund) is required to post collateral to support its payment obligation, but in the insane credit environment that preceded the credit crisis, this collateral deposit was generally too small.

As a result, the credit default market is best described as an insurance market where many of the individual trades are undercapitalized.

But even worse, many of the insurers are grossly undercapitalized. In one case in the New York courts, the Swiss banking giant UBS is suing a hedge fund that said it would insure nearly $1.5 billion in bonds but was unable to do so. No wonder — the hedge fund had only $200 million in assets.

If A.I.G. collapsed, its hundreds of billions of dollars of mortgage-related assets would be added to those being sold by other financial institutions.

This would just depress values further. The counterparties around the world to A.I.G.’s credit default swaps may be unable to collect on their trades. As a large hedge-fund investor, A.I.G. would suddenly become a large redeemer from hedge funds, forcing fund managers to sell positions and probably driving down prices in the world’s financial markets. More failures, particularly of hedge funds, could follow.

Regulators knew that if Lehman went down, the world wouldn’t end.

But Wall Street isn’t remotely prepared for the inestimable damage the financial system would suffer if A.I.G. collapsed.”

http://able2know.org/topic/122560-1

Torches and pitchforks. Torches and pitchforks.

From what I understand, there are already laws to pierce the corporate veil in case of fraud. Is there any reason the people who orchestrated this scam should not find themselves eating dogfood for the rest of their lives?

Bush could have said no. Tell the Wall Street sharks and cons to hang themselves and leave the US taxpayer alone. He had a choice and he chose fascism.

There needs to be some major piercing of corporate veils in cases of fraud. That's step #1 to inspire some confidence in the system.

Beyond that, I don't think that letting everything crash would be a good solution, or even that (assuming step #1 above was taken care of) it would necessarily end up saving the government money. If the government didn't act to rescue anybody else, the government would have to pay off many account holders of FDIC-insured instruments--possibly most of them. The economy would be left in such shambles that debt as a multiple of GDP would skyrocket. Does that sound like a good plan?

“Your right and nobody speaking on when this all started.
Remember GREENSPAN AND CLINTON'S SECRY OF TREASURY RUBIN?”

Actually, it all started in 1913 when Congress approved this aberration upon the American people. No coincidence that that the progressive income tax was also passed in the same year after the Fed was established. I am astounded at the fact that no one is calling for their heads, and those of both parties of Congress who have been complicit in this charade for years.

“You are just trying to be funny- Right?”

No way. I am very serious. Financial cycles come and go, but lose the next election and this is all going to look like a tea-party. I would say country-first, and this means PARTY UNITY. There is NO WAY this bailout is not going to go through — how does it help us to oppose our own party just before the election??

I would jump for joy to see hedge funds, that add unneeded volatility to the markets collapse. They are run by knee jerking amateurs that follow the market instead of leading it.

The cost to FDIC insured accounts would be minimal since most American money is in brokerage accounts, not insured savings accounts.

Throwing almost a trillion into financial markets doesn’t inspire confidence to me? If the government has to nationalize Wall Street, then something is really wrong.

So the cost for keeping the economy out of shambles is to bankrupt the nation and leave unaffordable liabilities for the next generations. I’m sure they will be so thankful.

Again, fascism in action.

Again, fascism in action.

The fundamental problem is that for years Fannie/Freddie have been allowed to sell their bonds as AAA without having to have underlying assets of sufficient quality to justify such a rating. If Fannie/Freddie had been told years ago that if the quality of their asset base deteriorated they would face a downgrade, we wouldn't be in the situation we're in now.

At this point, the only question is who should have to bear what portion of the damage that's been done. An allocation by default is apt to do much more damage to the economy than a systematic attempt to balance the damage. Unfortunately, I doubt the government will do a very good job allocating the damage, though even a mediocre job may be better than a default allocation.

Most important, it is a central player in the unregulated, Brobdingnagian credit default swap market that is reported to be at least $60 trillion in size.

What is the legitimate market function of a credit default swap? I can understand the legitimate value of some types of insurance (e.g. people live in houses, despite the risk they will burn down, because people can't live in an FDIC-insured bank account). What I don't understand is why there would be a market need for someone to buy a risky asset plus insurance, rather than simply buying a less-risky asset. If one doesn't want the risks associated with an asset, why not buy something safer? The only reason I can see for that would be with assets that had physical benefits related to possession.

The only function I can see for credit default swaps is to allow people to boost the apparent value of their portfolio by using the same assets to secure many promises.

The inside player know quit a lot.
What nobody is talking about is the REMOVAL of the very people that created this mess.
Chris Dodd, Barney Frank the scum that ran a CHILD PROSTITUTION house with tax payers money, Chuck Schumer that
grabs the mike to speak out to cover up the crimes.
THE PEOPLE THAT MADE THIS MESS ARE THE ONES THAT ARE PRETENDING TO HELP US OF THIS MESS. YOU CAN'T NEGOCIATE WITH CRIMINAL, THEY CAN'T REGULATE THEMSELVES.
I the criminals are not removed TODAY, NOW than ALL of America must call for the removal of Polosi and Reid. Our
Constitution requires them to be removed if not than those
that refuse to remove them must resign, NOW.
Protesters need to get their heads together and start to
think. We do need a bailout, regulated by new and honest people not the criminals that are holding onto their seats
because the must cover up their year of corruption.
Remove the criminals and no replacing them with their buddies that will only cover for them.
A I G the bailout is also corrupt, Gov.Paterson the Spitzer Pimp that was put into office to cover for Spitzer should have taken the money his used for higher rent payouts and gave that to A I G. Low rental housing got a increase in rent in New York, where is the money coming from. Gov. Paterson and the cronies in Albany are going to bankrupt the
state of New York.
NO DEALS, NO BAILOUTS UNTIL THE CRIMINALS ARE REMOVED FROM OUR GOERNMENT.
WE WOULD NOT BE FACING THIS MELTDOWN NOW IF THE CRIMINALS WERE BEHIND BARS.
Were not talking misdemeanors, were taking murder, child prostitution, treason, money laundering, voter fraud.
Open up the cells before any deals and made.
Please flood the networks with calls for the removal of Polosi and Harry Reid now if they do not remove Chris Dodd and Barney Frank, NOW, Send letter to all Senators and Representatives.

When the Clinton's were in office they also wanted their hands on the Social Security money, thank God for a Republican congress at that time, they made sure Clinton,Rubin and Green span couldn't get their hands on it.
Yes I say Clinton's with an S because both were very much a part of the Corruption. Hillary worked for the Socialist,Communist groups, every word she spoke was that of the Communist groups and She and these groups is what governed Bill Clinton.
The Clintons and his administration tried everything possible to bankrupt this country, the age of the Internet saved us.
Mayor Bloomberg says, LOW OIL PRICES IS BAD FOR THE ECONOMY. Who is he trying to kick, he must think were all stupid, He is very much a part of the high oil prices. How much money has Bloomberg and the Clinton and his party made of oil. How much money did Bill Richardson and not so bright
Albright made on the negotiations with Soddom?
Richardson travel around the world getting foreign leaders to cut back on oil production. Bloomberg network was showing were the Prince of Arabia was going into a meeting
and going to cut back on production. He fooled them, he said, no cut backs on production, Bloomberg TV station said,
he lied. Well the Prince died and his replacement is the one that is dealing with the Demorats in this country.
Clinton didn't bomb Iraq because he,Hillary,Chelsea,the UN
and the Almost bankrupt Demorat party were going to make
Billions of Soddom and they did. But Clinton had to satisfy
the Brokers of course, Hillary played her part putting our lives at risk bringing in people that could have cause wide spread diseases. Well getting back to not bombing Iraq for huge profits, satisfing the brokers and his donors, Clinton Blair, the U N NATO all play a role in the murder of many
innocent Serbian people when he went into Kosovo. Kosovo was a cover up for not bombing Iraq. Clinton now had to get back the money his investors were loosing and restore credibilty to the market, BOMB the Serbian oil refineries and that got them their money back. Now everyone is happy including the Phony man that called himself a Republican in order to get elected, Bloomberg. It was inside trading,
Murder and the now almost bankrupted Demorat party was well on their way to riches.
The Rats fought hard for the Election they had to stay in office if they were to cover up the corruption. Thru ELECTION FRAUD the regained the house and the Senate, enough
to get them were they are today. They delayed the take over
of the White House they new of 9/11 and they ran when it happened. When Pres.Bush decided to bomb Iraq, Biden couldn't get to Iraq fast enough. Soddom kept ed records on every thing, dates, names, so Biden had to get to Iraq in order to cover up the mass amount of money they were all making.
Please send letters to call for the remover of REID and POLOSI if Chris Dodd, Barney Frank and Chuck Schumer and Charlie Rangle.
Richardson needs to be tried for Treason. Rubens books need to be investigated, why didn't.t Rubin want anyone looking over his shoulders at his figures? Rubin the master mind of the cooking of the books, we still have not heard about the Treasury books the Rubin kept. RUBIN AND HIS DEALINGS WITH THE IMF, RUBIN REFUSED TO HONOR THE SOPOENAS, WHY DID TRENT LOTT AND DICK ARMY LET RUBIN OF THE HOOK? THE BAD LOANS AND DEALINGS WITH THE IMF NEED TO BE EXPODED. WHY ISN'T ANYONE CALLING FOR THE INVESTIGATION OF BOB RUBIN, CLINTON'S SECY. OF TREASURY?

Hal Turner talks about Amero’s
He was forced off the air because he kept talking about it.
http://www.youtube.com/watch?v=ge2J2lNusJs