Wednesday, February 10, 2010

Fast And Furoius

I tell ya, the news hits so fast not that some of the stuff I pot on here will be obsolete by the time I finish writing the post. It is amazing stuff to watch the world unravel before your eyes as the bankster vultures pick apart the financial carcass that is the American taxpayer. Don't worry, the bones are starting to show good and they will have it picked clean, nice and shiny by the end of the year.

Where to start? PIIGS, China, IRAN or any number of states here in the US? How about the DTCC announcement?

I'll start with a HuffPo piece - Obama Still Doesn't Get It - You know there are real issues when they blast the man. Regarding the O's comments on the mega bonuses of Dimon and Blankfein, "Not only that, but the incentives for the people running these megabanks is now to take on reckless amounts of risk. They get the upside (for example, in these compensation packages) and - when the downside materializes - this belongs to taxpayers and everyone who loses a job." Simon is dead nuts on target with this one. The banks have been feeding at the risk free trough. They have done nothing but take advantage of the worst crisis possibly in history to gorge themselves on taxpayer funds. This act will come back to haunt them in the end (and maybe that is why they are all getting fat now).

Denninger picked up and digests Freddie Mac to Purchase Substantial Number of Seriously Delinquent Loans From PC Securities in his post Are You SITTING DOWN Folks? "This is going to be a problem folks, because those loans in which reps and warranties (that is, the promises made to Freddie by the banks when they were sold to them) were breached due to a material falsehood of some sort will be, as a matter of fiduciary responsibility, puked back onto the bank involved." This one will be interesting. how will they protect our financial overlords here. I'm guessing they play a hold 'em till eternity and hope we all forget they ever existed. 

Mish has done a nice job covering the most unthinkable - Citigroup Plans "Crisis Derivatives" Yeah, I said it too, "You have to be fucking kidding me?" This is the ultimate proof that the banksters living in a 0% IR world with us as their backstop and still levering to the hilt have not learned one friggin lesson from any of this disaster. "This is yet another example that shows fundamental conceit. Systemic risk is not lowered by the introduction of new derivatives, it is heightened. The risk doesn't go away after all, it is just shifted.Moreover, since derivatives need speculative participants to provide trading liquidity, they actually ADD to overall systemic risk. That Citi would introduce such a product is a huge sign that the bottom is not in, and another huge crisis is coming."

If you have not seen it floating around, Washington's Blog has Yes, America is Still in an Official State of Emergency. I find this worth posting so you will understand the oval office's powers under this event and how they apply to the credit crisis and the banksters (can you say lax regulations and accounting gimmickry allowed by the president?)  Give it a glance. It will help you put all the pieces together. 

Prag Cap has a nice vid with GARTMAN: THIS IS MORE THAN A 7-10% CORRECTION I could not agree more. 

If you are still reading, the meatiest post of the day came late from ZH - Enter Cede & Co II; The Fed Is Now Backstopping $25 Trillion In DTCC Cleared Credit Default Swaps  Ever since the fiasco I have not trusted the DTCC and do not have nice things to say about them. This IMO is the perfect spot for the Fed to "control" the global CDS market. I should have seen this one coming. More secrecy and black shrouds in the dark hole I call the DTCC. "And you thought the $23 trillion in backstops for the financial system was bad, you ain't seen nothing yet."

Marketwatch does have something worth reading for those of you that need a primer on Why European debt matters to the United States  "The point of recognition will eventually arrive that our debt issues are cumulative; when that happens, the contagion will no longer be contained. In the meantime, as we edge from here to there, be on the lookout for the unintended consequences of European austerity initiatives, including but not limited to social unrest and the abatement of risk appetites."

HA! I have not even gotten to China, Iran, Greece, or Cali, NV ..... so I wont. The news flow is absolutely NUTS and a bit overwhelming to me jut to try to follow it. Can you imagine those trying to manage the fires right now? Impossible. Pick the biggest one and hope some of them go out on their own. Sorry, not gonna happen. You see, the credit driven inflated money pit has become some sort of all cash consuming monster that is GROWING. It is only a matter of time before we can not feed it anymore. When it can't be fed ever increasing amounts of cash anymore it gets sick and then we all suffer the terrible consequences.
Sorry - a late grab from ZH - Faber's Bold Prediction: Both The US And Europe Will Default On Their Debt - This appears to me to be the only way out, and I have speculated on this many times in the past. Massive cross country debt cancellations at government levels. Just wipe it all away.

GL out there and have a good evening.