Listening to all the bullsh*t that is coming out of WDC (Washington, DC) these past week about how we have to bail out the Wall Street and Political idiots that got us into this financial mess just made me understand that America truly can not be fixed.
I have decided that regardless of who gets into the White House in the fall, I will take my citizenship elsewhere since I can not longer support how this country is going and how the politicos in charge of the US Government are screwing things up.
This current financial mess got started by 3 very stupid governmental interventions into the free market mechanisms of our financial infrastructures:
1. The revocation of the Glass-Steagall Act in 1999 by the Clinton Administration
2. Implementation of the Sarbanes-Oxely requirements particuarly the FASB rule 157: "mark to market"
3. The change in CRA loan approval requirements by the Clinton Administration and implemented by Franklin Raines of the now nationalized Fannie-Mae.
If none of these three things mean anything to you then you are ignorant of what is happening today and you need to do your homework before taking part in any discussion of current events. Back tracking through the 3 event above will lead you to the basis for all the financial woes we are experiencing today.
I will help you with the probably the toughest link: #3
When the CRA (community reinvestment act) requirements for community banks to show that they are not red-lining (using a red pen to disapprove loans) lower income, minority applicants, banks were told that they had to lower their lending standards to cover those that could not qualify for a loan otherwise. This began during the Clinton Administration and continued into the Bush Administration under the watchful eye of Franklin Raines, the head of Fannie-Mae from 1998-2004, and who walked away with over $115,000/month pension for life plus full medical and dental benefits. Yes, that's 115K per month, not year!
Now the next step is to follow Franklin onto the Obama Campaign since BHO (Barack Hussein Obama) received over $400,000 from Fannie&Freddie in the few years he was a sitting senator, and not running for the Presidency. Seems like BHO has some vested interest in keeping Fannie&Freddie from being more regulated, eh?
The real crime is that once the CRA rules were lowered, and the loans to those people who were not qualified began to come in fast and furious during the Alan Greenspan 1% interest rate dips (this is where the real sub-prime mortgage crisis got started), it was Wall Street that found a way to make money on them. Simply take the "toxic paper" (real interesting name) and bundle them with some decent loans and call them CDO (collateralized debt obligations) and to make them AAA rated, develop another derivative instrument called a CDS (credit default swap). Since pension plans and municipalities can't invest in anything but AAA, then the CDS where the real work of genius by Wall Street MBAs. Simply, a CDS is a private bet (that everyone in the Bush administration didn't want to regulate) between the buyer (the one buying the CDO) and the seller (those insuring against the default of the CDO) that for the buyer paying an annual premium, the seller would guarantee against CDO default. This is were AIG, Bear Sterns, and Lehman Brothers come in. They were the biggest sellers of these CDS which now according to the International Banking Organization total over 600 Trillion!
When the US real estate market began to fail due to rising interest rates and all the sub-prime mortgages now having to reset, the buyers of the CDOs came to the sellers of the CDS and demanded their money for the default of the AAA rating on these now toxic CDOs. Well, there wasn't enough money on the planet to cover these insurance bets and then whole process (the house of cards) can tumbling down.
I will let you work out the rest of the linkages, but they are not the hard. They have to do with the ones that are writing the bail out on Capital Hill: Senator Dodd and Congressman B. Franks. Look into their contributions from both Fannie and Freddie to get an idea why they want to bail out these financial organizations.
Predictions: this bail out will NOT work as the total amount of the toxic paper (interesting epitaph) is not known and what the bail out bill does to setup the process of implementation is just silly. The Treasury Dept is going to hire "competent money managers" to oversea the purchase of these assets, and these managers are the same ones that got us into this mess: they are from Wall Street!!! Can anyone spell CRAZY? Then the US Government is going to conduct a reverse auction where they will be the only party and if no one else bids, then the taxpayer becomes the owner of these assets.
Secondly, the bill does not cancel the golden parachutes of the Wall Street CEO's that are already written, only future contracts! This means that all those that aren't out now are the suckers ;-) CEOs like Franklin Raines is safe with his 1.5 million per year pension and those from the now de funk Bear Sterns, Fannie, Freddie, Lehman Brothers, Merrill, etc are safe. What a shell game, eh?
This is the end of the USA, folks. The terrorists couldn't take us down with their military activities, but we will be taken to the wood shed by our own financial and political types whose "need for greed and power" will put the USA into the category of "has-been". The end of mankind will be written without the USA in attendance.
American has finally stepped on to the one land mine that could take it out, and the idiots in Washington are going to be fiddling while America burns to the cheers of the radical fascists around the world. Sad, so sad.
A moderated blog (due to blogspam) that now believes America has moved too far down the road towards socialism to come back and recover its former glory. Truly, America's best days are behind her. Major topics include politics and investing.
Sunday, September 28, 2008
Saturday, September 20, 2008
Americ CAN'T be Fixed!
I know that its been awhile since I have blogged anything about fixing America, but after the financial crisis and how both sides (Democrats and Republicans) are attacking each other without caring about how this will impact the future of this country, I have reached one conclusion:
America can not be fixed! American is headed for destruction based on its own greed, apathy and lack of real statesmen and women to step forward and come up with viable solutions. All we are left with are the screeching banshees like Speaker Pelosi and Hillary Clinton, the inept like President Bush (yes, I said President Bush since most of the financial crisis can be laid at his administration's feet), and the greedy like Wall Street Investment bankers, commercial bankers' and the unbelievable crop of Ivy League-trained MBA's that think the only code of ethics is how much money can they make for their next bonus.
To be specific this whole mess which is where the US will finally be taken down was born in the 80's when the deregulation of the S&L industry (savings and loan industry) led to the huge S&L debacle. One lesson that we must understand is that while capitalism is the best system on the planet since it rewards personal initiative and industry, it does come with one major flaw: it breeds the seeds of its own destruction - greed. This is where government can be useful since a pure "laissez-faire" capitalistic system is unworkable in much the same way a pure "Marxian-Socialist" socio-economic form of association fails. Both forms of socio-economic arrangements fail to take into account the one thing that damns them both: human nature. The "laissez-faire" formation ignores the greed and power element of human nature while the "Marxian-Socialists" ignore the power and laziness of human nature.
By ignoring these inherent limitations of the human spirit, both infrastructures while workable for a small period of time sow the seeds of their own destruction without some intervention of government. The "Marxian-Socialists" dissipate much earlier since laziness and apathy is much harder to overcome than greed, but ultimately both systems will implode.
We have seen this in the demise of the Soviet Union in the late 1980's and we are now seeing the seeds of the destruction of the US: greed. The 1929 stock market crash was the first ripple in the pond and that expanded into the Vietnam War (done primarily for the financial enhancement of LBJ's Texas buddies), the 1980 S&L crisis, numerous commercial bailouts of bad management and companies (airlines, Chrysler, aircraft manufactures, hedge funds, and now Wall Street). The US taxpayer is now on tap for over 2 Trillion (that's 2 million million) dollars to bail out the Wall Street investment and mortgage banks because we are told they are "too big to fail". We are going to bail-out those that over-bought, over-sold, over-reached, over-risked, and then cry to the government to "bail them out" with taxpayer funds, and worse, the government does it in spades. The action of the US Government will have a ton of consequences that can not be seen at this time, but I suggest that this will not solve the problem they think it will. There is over $650 Trillion (that's right, the big T) US dollars of derivatives on the books of the world's financial organization for which there is no way to deleverage or unwind. The US real estate crisis that led to the US financial crisis is just the beginning: both were formed in the human cesspool of GREED.
America is doomed and there is nothing that can be done to stop the slide into complete ruination regardless of which candidate enters the White House in January. The corruption and completely dysfunctional Congress led by the totally inept and bungling Nancy Pelosi and Harry Reid (lowest approval rating in history - 9%) has failed in all respects to address the country's needs while the current President Bush appears to have very little clue about how to even suggest repairs and is only hoping for a quick end to his sad, and mismanaged 8 years a President.
I am not a partisan only a sadly, once proud American that can no longer be such. The US can not be saved, and I for one do not want to remain while its citizens continue to fight over "lipstick on a pig" or the nightly political trash on the Fox New channels and left-wing broadcast news shows. We have outlived our usefulness on this planet and its time for the US to fade away and let the world spin down on its own.
The best days of the US are behind it when its citizens believed that there was an American dream; now there is just "how can I scam the system?" or "how can I get mine, screw the consequences?" Americans don't care about each other, the world of the future. We have truly, as Lincoln bemoaned, become a "house divided against itself". We are in the midst of another civil war, one of thoughts, slogans and issues, not guns, canon or picket lines, but nevertheless, one from which we will not survive.
We will leave the world a void from which it will not emerge since the fanatics and zealots will soon bring down the remainder of the intelligence left on this little ball in space. From the void if anyone is watching, they must be truly either laughing or puzzled how we could choose to make such moronic decisions and take such fruitless paths, but we have done it in spades.
I am sorry that American can't be fixed, but I am never one to "beat a dead horse", and the US has finally become the proverbial expired equine. It is time to "bring out the dead" and move on. Lower the Stars and Stripes and make way for the final act: we have done it to ourselves.
America can not be fixed! American is headed for destruction based on its own greed, apathy and lack of real statesmen and women to step forward and come up with viable solutions. All we are left with are the screeching banshees like Speaker Pelosi and Hillary Clinton, the inept like President Bush (yes, I said President Bush since most of the financial crisis can be laid at his administration's feet), and the greedy like Wall Street Investment bankers, commercial bankers' and the unbelievable crop of Ivy League-trained MBA's that think the only code of ethics is how much money can they make for their next bonus.
To be specific this whole mess which is where the US will finally be taken down was born in the 80's when the deregulation of the S&L industry (savings and loan industry) led to the huge S&L debacle. One lesson that we must understand is that while capitalism is the best system on the planet since it rewards personal initiative and industry, it does come with one major flaw: it breeds the seeds of its own destruction - greed. This is where government can be useful since a pure "laissez-faire" capitalistic system is unworkable in much the same way a pure "Marxian-Socialist" socio-economic form of association fails. Both forms of socio-economic arrangements fail to take into account the one thing that damns them both: human nature. The "laissez-faire" formation ignores the greed and power element of human nature while the "Marxian-Socialists" ignore the power and laziness of human nature.
By ignoring these inherent limitations of the human spirit, both infrastructures while workable for a small period of time sow the seeds of their own destruction without some intervention of government. The "Marxian-Socialists" dissipate much earlier since laziness and apathy is much harder to overcome than greed, but ultimately both systems will implode.
We have seen this in the demise of the Soviet Union in the late 1980's and we are now seeing the seeds of the destruction of the US: greed. The 1929 stock market crash was the first ripple in the pond and that expanded into the Vietnam War (done primarily for the financial enhancement of LBJ's Texas buddies), the 1980 S&L crisis, numerous commercial bailouts of bad management and companies (airlines, Chrysler, aircraft manufactures, hedge funds, and now Wall Street). The US taxpayer is now on tap for over 2 Trillion (that's 2 million million) dollars to bail out the Wall Street investment and mortgage banks because we are told they are "too big to fail". We are going to bail-out those that over-bought, over-sold, over-reached, over-risked, and then cry to the government to "bail them out" with taxpayer funds, and worse, the government does it in spades. The action of the US Government will have a ton of consequences that can not be seen at this time, but I suggest that this will not solve the problem they think it will. There is over $650 Trillion (that's right, the big T) US dollars of derivatives on the books of the world's financial organization for which there is no way to deleverage or unwind. The US real estate crisis that led to the US financial crisis is just the beginning: both were formed in the human cesspool of GREED.
America is doomed and there is nothing that can be done to stop the slide into complete ruination regardless of which candidate enters the White House in January. The corruption and completely dysfunctional Congress led by the totally inept and bungling Nancy Pelosi and Harry Reid (lowest approval rating in history - 9%) has failed in all respects to address the country's needs while the current President Bush appears to have very little clue about how to even suggest repairs and is only hoping for a quick end to his sad, and mismanaged 8 years a President.
I am not a partisan only a sadly, once proud American that can no longer be such. The US can not be saved, and I for one do not want to remain while its citizens continue to fight over "lipstick on a pig" or the nightly political trash on the Fox New channels and left-wing broadcast news shows. We have outlived our usefulness on this planet and its time for the US to fade away and let the world spin down on its own.
The best days of the US are behind it when its citizens believed that there was an American dream; now there is just "how can I scam the system?" or "how can I get mine, screw the consequences?" Americans don't care about each other, the world of the future. We have truly, as Lincoln bemoaned, become a "house divided against itself". We are in the midst of another civil war, one of thoughts, slogans and issues, not guns, canon or picket lines, but nevertheless, one from which we will not survive.
We will leave the world a void from which it will not emerge since the fanatics and zealots will soon bring down the remainder of the intelligence left on this little ball in space. From the void if anyone is watching, they must be truly either laughing or puzzled how we could choose to make such moronic decisions and take such fruitless paths, but we have done it in spades.
I am sorry that American can't be fixed, but I am never one to "beat a dead horse", and the US has finally become the proverbial expired equine. It is time to "bring out the dead" and move on. Lower the Stars and Stripes and make way for the final act: we have done it to ourselves.