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The current economic morass is the natural and inevitable result of ignorant meddling by Congress and their co-conspirators in the White House and other bureaus, administrators, and petty officials within the government. These miscreants gave bad actors the ability to make huge bets on the viability of all publicly traded companies and also gave these same bad actors the ability to control the viability of all of those same publicly traded companies. And they still refuse to own up to it.
1. It started in 1996, December 5th to be specific, when Alan Greenspan took the Federal Reserve off the Gold Standard. The de facto gold standard that is. Prior to this, Mr. Greenspan set the Fed funds rate to the 2-year moving average of the price of gold. After that date, he used the Fund rate willy-nilly to attempt to control the market for political purposes rather than serve it. We now see the result.
2. In 1999, President Clinton’s appointee Franklin Raines reduced credit requirements to provide loans to people who couldn’t rationally afford them. These bad loans were securitized with other more stable loans and sold to investors backed by the full faith and credit of the US Government.
3. On Nov 2, 1999, President Clinton signed the Gramm-Leach-Bliley Act repealing the Glass-Steagall Act of 1933 which separated the investment banks from the commercial banks. This firewall had protected John Q. Public’s banking services from being unduly threatened by the risk inherent in the investment domain. On the single week of September 22, 2008, all the investment banks disappeared into the commercial banking realm, thus doubling the size, power, and control of the Federal Reserve.
4. On December 21, 2000, President Clinton signed into law the bill defining Credit Default Swaps and exempting them from regulation by the SEC and CFTC. There are 2 kinds of CDS; covered CDSs which are essentially insurance products exempted from oversight by insurance regulators, and naked CDSs, which are basically gambling, except the holders of the cards can pick their own hand.
5. On July 6, 2007, the SEC eliminated the uptick rule which heretofore had prevented gangs of short-sellers from driving a target company into insolvency. (As a side note, this was the result of lobbying by Bernie Madoff).
6. On November 15, 2007, the FASB imposed mark-to-market accounting. This essentially destroyed a firm’s ability to get financing using its securities as collateral.
So there you have it, the perfect storm created by Congress, the President, or their designees, which churned over time and eventually turned into the current disaster. It can also be noted, that all the measures taken by the Presidents and Congress over the last year have only had the effect of further exacerbating the problem until March 9, 2009.
1. On March 10, 2009, Representative Frank, Chairman of the Financial Services Committee, announced a plan to reinstate the uptick rule. In the week following that announcement, the markets rose 20%.
2. On March 16, 2009, the FASB announced plans to revise mark-to-market accounting to remove the feedback loop driving companies into insolvency. In the week following that announcement, the markets rose 10%.
But still Congress refuses to admit their own culpability and reverse the irrational interventions they have made in the market over the last decade. It is interesting to note the parallels between the actions of Congress and the The 5 Stages of individuals faced with a long term mental illness like bipolar disorder .
1. Denial - The "No, not me" stage.
This stage is filled with disbelief and denial. You think the doctor has to be wrong, that there is no way you have a mental illness, especially not one you will have for the rest of your life.
2.Anger/Resentment - The "Why me?" stage.
Anger at the situation, perhaps anger at the person you perceive as triggering your episode. Anger at the doctor and the hospital for their audacity in labeling you with a mental illness. Perhaps anger with yourself for things you have done that you think may have "brought on" the episode of bipolar disorder. Anger that it is you who has been afflicted, when it could so easily have been someone else.
3. Bargaining - The "If I do this, you’ll do that" stage.
You try to negotiate to change the situation. If you think it was triggered by a relationship, for example, you swear that you will be better, and it won't ever happen again, if you just don't have to have this illness. You bargain that you will give up bad habits in exchange for wellness "I will quit drinking; smoking etc. if only the bipolar disorder goes away.
4. Depression- The "It's really happened" stage.
You realize the situation isn’t going to change. Perhaps you have had another episode. Perhaps you stopped taking your medication, only to discover that you became ill again. It finally begins to set in, and you ponder what this disorder is going to do to your life as you had known and accepted it. This is a stage of preparedness for acceptance, and finally one day it is reached.
5. Acceptance - The "I do have Bipolar Disorder" stage.
The actions necessary to placate Mr. Market are this simple:
1. Direct the Chairman of the Federal Reserve to set the fund rate according to the price of gold.
2. Define the only acceptable home loans to receive federal guarantees to be fixed- year, fixed-rate mortgages on owner-occupied primary residences with no prepayment penalties and required proof of ability to pay.
3. Reinstate the firewalls between commercial and investment banking.
4. Place covered CDSs under the purview of insurance regulators and ban naked CDSs.
5. Reinstate the uptick rule on all stock transactions.
6. Eliminate mark-to-market accounting.
With the help of the scammers running the show, It is always easy to get lost in *recent* details. In fact there are only two basic laws which have been violated to create the extant Systemic Impediments: (1) Article IV of the US Constitution Amendments which prohibits illegal searches and illegal seizures and (2) number varies depending on interpreter but Mosaic Law specifies "Thou Shalt NOT steal".
Criminal manipulation of the markets using "stock index futures" was authorized by Ronny Raygun in 1982 and went into flagrant and obvious use commencing in 1986. Criminal theft of all and more than all of the stockholders equity out of vast swaths of publicly owned corporations was implemented by His (later made for his treasons against the United States) British Lordship the criminal mastermind Greedspan commencing during the engineered by stock index futures blowoff and inevitable Crash of 1987. Most recent crucial criminal theft of property in violation of Article IV was the illegal seizure by the criminal gangs directed by Gulled Mon Sux and Citicrap (under their cover story of "being" the taken over "New York Stock Exchange") of ALL STOCKS for the permanent adverse possession of criminal gamgs, subject to at whim vaporization not only of the stocks themselves but also of any "income" imputed to the taxpayer "owner" devoid of anything of value ever being paid to or for the benefit of the victimized stuckholder.
The flagrantly criminal publication of confidential personal financial information on their infinitely hackable web sites by the bunkos and other financial intermediaries was another aspect of the criminal abrogations of Article IV, as was the creation of automatic criminal theft mechanisms for every thief everywhere in the entire world who, having gotten the routing numbers from those infinitely hackable web sites, was then enabled by Greedspan and his successor Burn Yankee to vacate any financial account anywhere under control of the criminally abrogative and abusive Frauderal Reserve Bored. The procedures defined for recovery from such criminal at whim thefts (illegal seizures in violation of Article IV) are draconian at best and, in some states such as Massa Chews Its, are specified as a matter of reputed law to be unavailable to residents of that criminally blighted state.
But bottom line there are only two basic criminal mechanisms at work in the gutting and looting of the American financial and economic systems: eagerness of the criminally corrupt legis critters and administration in the District of Corruption to abrogate Article IV and violate the "don't steal" aspect of Mosaic Law which the torture and murder religion that they inflict on Americans in violation of Article I of the US Constitution Amendments only preaches without ever practicing.