The Long Tail of the Trillionaires

Technocrat

The Long Tail of the Trillionaires

zogger

Fri Sep 19 16:23:00 -0700 2008

Jobs.

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Or is that tale? Here is the text from the Secretary of the Treasury's news conference today.

ed.z.: As you read this, understand what they are trying to sell to the public is the fairy tale that subsidizing billionaires when they bet wrong and get *way* overextended will have a long tail and "save the economy". Really, that's the big plan, that's what they came up with. Keep in mind, what they are trying to save is the collapse and most likely social unrest that would follow from one quadrillion dollars of derivatives and the gambling trade therein across the globe once a lot more people realize how ridiculous that is even in theory. That's a thousand trillion dollars, or what they claim is worth a thousand trillion dollars, which is beyond ludicrous, in terms of real goods it is less than a percent of that, but that is the casino economic system they are trying to save. Also note the complete toothless paper tiger that is Congress and how they keep going along with this great heist (along with other big nations and their equivalent central banksters and legislatures, plenty of blame to throw around here, it isn't all just the US we're talking). They've abdicated all authority and all reasonableness and seem to think it is perfectly OK for a group of private bankers and their drinking buddies to just *seize* vast swaths of the economy and put the tax payer as the ultimate guarantor and a few of the elite get to stay "the elite" instead of becoming bankrupt and out on the street looking for a real job like they deserve. YMMV, that's how I see it today, just more mass thievery.

BTW, tangibles-stuff you can really put your hands on- still rule...

The Long Tail of the Trillionaires

truthAddict

Fri Sep 19 23:46:16 -0700 2008
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Yes, tangibles always rule. The stupidity of Western civilization is shown in how easily we've been brainwashed that this isn't true. We've bought in to the lies that our pieces of paper are going to save us. Our debt instruments, our intellectual property, our inflated petrodollars. It's all completely valueless.

Allow me to enlighten the secretary:

The underlying weaknesses in our financial system today is illiquid mortgage assets that have lost value as the housing correction has proceeded. These illiquid assets are choking off the flow of credit that is so vitally important to our economy.

The underlying weakness in our financial system is that it's based on valueless paper, US dollars, whose price must logically go down as supply is increased and demand is kept relatively constant. The underlying weakness of our economy, our inability to supply ourselves with necessities of life, bears itself out over many economic sectors. The financial sector happens to be one, albeit one on the front lines.

What began as a subprime lending problem has spread to other, less risky mortgages and contributed to excess home inventories that have pushed down home prices for responsible homeowners.

No, it began years ago as a problem of economic fundamentals. This subprime crisis is just the most recent boiling point.

When the financial system works as it should, money and capital flow to and from households and business to pay for home loans, school loans and investments to create jobs.

When the financial system works as it should, banks are bound by law to hold 90% of their deposits in reserve. The small amount left over is enough to fund investment over the small region the bank services. If the 10% is run away with, the responsible parties are held accountable through bankruptcy, and the remainder is insured by FDIC. Although inflation will be necessary to make it up, it isn't nearly enough to break the camel's back. School loans are for the large part unnecessary if education is publicly funded (through equal subsidy), but privately run. This allows parents and young adults to pay their own way for what they want, not what the government wants. And it still avoids those nasty Old European class problems where only the rich can pay for education. But that would be too easy, wouldn't it?

The inability to determine their worth has fostered uncertainty about mortgage assets and even about the financial conditions of the institutions that own them.

Tell me Mr. Secretary, have you heard of this new-fangled market thingy? It has a brilliant method to determine the worth. Put up a "FOR SALE" sign.

As a result, Americans' personal savings are threatened, and the ability of consumers and businesses to borrow and finance spending, investment and job creation has been disrupted.

Americans' personal savings are threatened by inflation more than anything.

To restore confidence in our markets and our financial institutions so they can fuel continued growth and prosperity, we must address the underlying problem.

Oh really? And how do you propose we do that? Wait for it ...

The federal government must implement a program ...

Ugh, I can't go on. The goggles do nothing.

The world is currently locked in a petro-nuclear game of chicken. If too many PECs deny cheap-enough oil to the US, they risk getting nuked/invaded/"liberated". But if we move up too far into Russia's or China's neighborhood, they'll push back on us. And Russia is now pushing back. China shouldn't be too far behind. Our basic strategy is this:

Let's attempt to continue our extortion racket and hope that Russia and China will just be asleep at the wheel.

Lovely. And that's about where we stand right now.

ass-u-me on the long tail

rubycodez

Sat Sep 20 11:52:40 -0700 2008
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with this bailout plan they're assuming housing will go up again, assuming buyers will be found for bad debt, assuming deficit can be handled (and tax revenue will grow), assuming economy will grow.

and of course assuming no other major crisis of similar magnitude are coming.

any failure in two or more of those assumptions means we're boned for certain, although just one bad call might do.