The Fed and Treasury have acted as insurers of last resort to lower business risk. In fact one of the primary functions of government is to reduce risk by pooling it and actively engaging in loss prevention services.This doesn't lower business risk, it just transfer risk from the people who lend the business money to the taxpayer. Doesn't see like the right thing to do to me. Why should a goverment be involved in risk pooling? I believe that why we have insurance companies. If the insurance company makes a mistake it goes bankrupt. If the goverment makes a mistake the taxpayer pays. Again, doesn't seem like the proper way to do things.
The Fed propaganda machine is working full steam and anyone that doesn’t understand steps 1 through 5 (which unfortunately is still a majority of citizens), it must be reassuring to know how “productive” the Fed has been lately.
Indeed Davos, I had the hair standing up on my neck as I watched Dimon, Blankenfien, and the rest of the cartel actually trying to convince the panel they had no idea the crisis was coming…
Key rebuttles to the coined responses notwithstanding, I thought it was interesting that Dimon said these “crises” (yes plural) come along every few years…meanwhile LB said we can in no way prepare for the 100 year storm (insert hurricane analogy here)…
What a crock, great essay Chris and thanks for the continued diligence…hope to see you in Sonoma…
Cheers!
[quote=seanj360]“Two things are infinite: the universe and human stupidity; and I’m not sure about the universe.”…Albert Einstein
[/quote]When it comes to LB doing God’s work and Dimon I couldn’t think of a more apropos statement!
- Loaning money for a house to someone who had to lie to get a mortgage?
- Loaning money for a house to someone who would have their interest rate reset beyond a manageable service price?
- No income, no documentation, no job?
- Interest only loans?
- Reverse amortization?
- 1-5 drive up demand since God knows how many buyers that were locked into renting were added to the home buyers market. Increased demand equates to increased prices?
- Wages have been flat, so unless a buyer has made a killing and has equity or a rich uncle?
Wonder what they will say when they get asked about CRE, Alt A’s and Option Arms (wave 2 that is coming to shore in spring/summer 2010)? Wonder what they will say when the 1.6 quadrillion shadow banking system collapses?
For those who understand the very simple idea that the Federal Reserve prints Federal Reserve NotesI don't understand this because last time I checked it is the Bureau of Engraving and Printing that printed all the of the Federal Reserve Notes at the cost of printing and sells them to the Federal Reserve. But the Federal Reserve just doesn't get to buy them they have to put up collateral when the purchase those notes, equal to the face value of the notes and in fact they do not record any profit on the purchase.
Also Federal Reserve Notes do not bear interest.
Thanks for the links - I’m attaching those to my investment groups weekly update for weekend reading. Please keep em coming. I found the CM website by reading a blog on zerohedge.com and am very grateful people take the time to share something they think is important with others.
I wonder of the approximate 45 Billion in profits, how much was paid in dividends to the stockholders of the Fed (private bank for profit)? Maybe the FED benefits from a crisis. Their profits(OK printed profits) actually would increase during a crisis. If the shareholders of the FED get to spend a portion of the profits, then are they real?