Posted on 01/28/2009 9:55:34 PM PST by BAW
In the past, whenever the financial system came close to a breakdown, the authorities rode to the rescue and prevented it from going over the brink. That is what I expected in 2008 but that is not what happened. On Monday September 15, Lehman Brothers, the US investment bank, was allowed to go into bankruptcy without proper preparation. It was a game-changing event with catastrophic consequences.
For a start, the price of credit default swaps, a form of insurance against companies defaulting on debt, went through the roof as investors took cover. AIG, the insurance giant, was carrying a large short position in CDS and faced imminent default. By the next day Hank Paulson, then US Treasury secretary, had to reverse himself and come to the rescue of AIG.
But worse was to come. Lehman was one of the main market-makers in commercial paper and a large issuer of these short-term obligations to boot. Reserve Primary, an independent money market fund, held Lehman paper and, since it had no deep pocket to turn to, it had to “break the buck” – stop redeeming its shares at par. That caused panic among depositors: by Thursday a run on money market funds was in full swing.
The panic then spread to the stock market. The financial system suffered cardiac arrest and had to be put on artificial life support.
How could Lehman have been left to go under? The responsibility lies squarely with the financial authorities, notably the Treasury and the Federal Reserve. The claim that they lacked the necessary legal powers is a lame excuse. In an emergency they could and should have done whatever was necessary to prevent the system from collapsing. That is what they have done on other occasions. The fact is, they allowed it to happen.
(Excerpt) Read more at ft.com ...
a. system-wide and compulsory recapitalisation of the banking system and a thorough overhaul of the mortgage system
b. That would involve putting a floor under the price of fossil fuels by imposing a price on carbon emissions and import duties on oil to keep the domestic price above, say, $70 per barrel.
c. the international financial system must be reformed . .
d. In addition, banking regulations need to be internationally co-ordinated. Market regulations should be global as well
Scary stuff. Me fears with the influence Geo Soros has, this may already be in Barack's mind.
He’s right about one thing. Paulson and Bernanke were completely, utterly incompotent in letting Lehman brothers fall.
This socialist scum-bag ha been manipulating currencies for decades. He wins every time a currency fails. he made billions betting against the pound. he made billions betting for the Euro. He will make billions shorting the dollar as our economy tanks. To quote the biggest doofus on TV, Soros is “the worst person in the world!!!”
Soros doesn’t give a rats @ss about the US economy. Why should we listen to him?
EFF off...Soros....
“Finally, the international financial system must be reformed. Far from providing a level playing field, the current system favours the countries in control of the international financial institutions, notably the US, to the detriment of nations at the periphery.”
World communism.
I bet soros himself had a large part in the meltdown.
Ah the fixer of all things economic has issued his ‘policy’ paper. Guess we shall see what the price of oil does after his policy paper gets global review.
Because he owns our president, lock, stock and barrel.
As well as Soros owning (or at least having a 'lease with an option to buy') all of the senators and congresscritters who have had a direct hand in setting up the situation that caused the problem in the first place.
What he’s calling for is more regulation of financial markets on an international level. Same thing he’s been saying for years.
I bet soros himself had a large part in the meltdown.
I believe this whole so-called economic meltdown was caused by Soros, the Democrats and the International Communist Conspiracy, of which the Democrat Party and Soros are members.
Guys, it isn’t real. This is a faux crisis they have created so they can take absolute power and turn America into a Communist atheistic Islamic republic.
I hope Soros loses millions!
The election was over on Sept. 15. I’m in the camp with el Rushbo that it will go down as the greatest October surprise in history.
No. He needs to lose billions to feel the hit.
Perhaps they did orchestrate it, but I vote for the CRA+The Masters of The Universe who saw ways to get very wealthy by inventing all sorts of toxic instruments, many based directly on these mandated no-collateral loans and the constant refis that allowed people to use their equity as a line of credit.
However, even if this Crisis was begun by Soros and the hedgers, IMO, it got out of hand and they were helpless to stop the dominos from falling. I don’t think they realized the interconnectedness of the global economy, or, if they did, they thought that they could pick winners and losers and keep control.
Soros has not stood alone. Quantum (his hedge fund), worked with all the other hedge funds over time. We were hearing tales of this cooperation back 3-4 years ago from people who worked for other funds in IT capacities that involved setting up the conference calls and ensuring that the lines of communication were open around the world. I recall reading a few little squibs about then to the effect that the SEC had launched an international investigation into trading patterns and legality of the hedge funds and currency traders. Once again, the regulators failed, whether by incompetency or design.
What were the redemption rates at Quantum? I have read many articles about the losses of all the other hedge funds, but I haven’t read the stats on Quantum. Anyone know?
The initial impetus may have been fabricated, but the results we are living with today are real, in that businesses across the country are failing, people have lost their jobs, states are bankrupt, the Federal Government is consolidating ownership of private resources, etc, et al.
I keep thinking that it was one thing to bring about Fascism or Socialism in countries that were devastated by WWII or had a history of Strong Men or a population unused to freedom and accustomed to obeying authority and quite another to attempt a swift take down of an independent and contrary populace used to affluence, whether provided by themselves or the state, and convinced they possessed individual freedom enshrined in the Constitution, even if some of them wanted to limit that freedom for everyone else.
I think perhaps 30% of the zerOids were moochers and looters and another 20% were cynically implementing a contrived takeover. The other 50%, IMO, were taken in by the hype, manipulated by inculcated guilt or just too weak and ignorant to understand what was guaranteed to take place once this crowd was in power. Now, they are experiencing the reality and it bites.
While the stimulus passed, there were 15 donks (IIRC) who voted with the GOP. No Republicans voted for the mess, this time. The coup is not complete, not all the cadre is on board. Now, we have to see just what transpires. If enough donks and donk voters rebel, then all the manipulators are in for a great surprise.
I hope.
We're in for a rough ride.
So, Soros wants to utilize a measure that was designed for "saving the environment" to "save the economy". What a conveniently suspicious coincidence(!)
I don't believe that they want the Islamic part, but they're going to get it.
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