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Author Topic: 'An Insiders Game'  (Read 1807 times)
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WhiskeyGirl
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« on: May 13, 2013, 09:04:14 AM »

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“Look at the stock market, it’s booming! Look at the housing market, it’s recovering! Look at consumer price inflation, it barely moves the needle! Look at gold, we have crushed it! Pay no attention to that debt behind the curtain! Forward!”

Outsiders watch bewildered. What does it mean that hopelessly bankrupt nations like Spain can borrow money at less than 5 percent interest? What does it mean that 60 percent of home purchases in many U.S. metro markets are being made in cash, and that hedge funds and institutional investors are the largest buyers? What does it mean that the Dow and S&P 500 are hitting record highs while 47 million Americans are on food stamps? What does it mean that the official unemployment rate is going down while the number of people not working is going up? What does it mean that the Consumer Price Index is showing less than 2 percent inflation?

I’ll tell you what it means. It means that this whole thing has become an insider’s game.

The reason we are not seeing consumer price and wage inflation is precisely because quantitative easing—the Fed’s fancy term for flooding the economy with new cash—is failing, and everybody knows it. Businesses and consumers are not fooled by the illusory wealth effect. Despite the happy-days-are-here-again campaign, ordinary people and companies are not running out to borrow and spend, hire, or expand, because they are not stupid. Anyone with half a brain is hunkering down, knowing that when the next crisis comes, it’s going to be very, very ugly.


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... Mortgage debt and sovereign bonds, every bank stuffed to the gills, all “insured” by a chain of derivatives only as strong as its weakest counter-party link. But isn’t the souring of mis-priced debt exactly what caused the last catastrophe? Yep. So what is different this time? What is different this time is that when history’s biggest Bad Bank, the lender of last resort, the printer of the only global reserve currency runs out of gas, there will be no one left to bail it out.

Where is the bailout fund for the Fed?  Generational theft and slavery for the masses?

read more here - http://www.forbes.com/sites/billfrezza/2013/05/07/how-the-federal-reserve-became-historys-biggest-bad-bank/

Obama and Bush mentioned 'our financial system'...

For some reason, 'our' system doesn't seem to to work the the masses, the over taxed working stiffs, just the elite, big global banks/companies, and the elite welfare recipients.

What happened to prospering from hard work?  Effort? 

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WhiskeyGirl
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« Reply #1 on: May 13, 2013, 09:16:26 AM »

"The Financial Products That Blew Up The Global Economy Are Sliding Into The Shadow Banking System"

Quote
The products that threw banks around the world into free-fall, dragging the global economy down with them, are not gone — they're just moving into hedge funds, Bloomberg reports.
Because hedge funds are far less regulated than your average bank, they're considered a part of the shadow banking system.
Additionally, because hedge funds are far less regulated than your average bank, they can pick up the assets that governments are forcing banks to get rid of — things like distressed corporate debt, mortgage backed securities, and all sorts of fun credit derivatives.

Read more: http://www.businessinsider.com/hedge-funds-pick-up-credit-dervitives-2013-5#ixzz2TB6eSbVw

Why isn't a financial firewall being created to protect taxpayers?  All those little people on Main Street that are always seem to get stuck with TRILLIONS in debt, losses, bailouts, and a never ending list of political financial gambling debts?
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It doesn't do any good to hate anyone,
they'll end up in your family anyway...
WhiskeyGirl
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« Reply #2 on: May 13, 2013, 09:22:28 AM »

Screwing the taxpayers again?

When it comes to the little people, thousands and thousands of new regulations, taxes, fees...

When it comes to big global banks and other financial businesses?

"Day of the Deregulators"

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Wall Street will be watching the House Financial Services Committee today – and counting on the rest of us to have our attention elsewhere.

The committee will consider a package of proposals to roll back important reforms adopted after the 2008 financial crisis. Most of these bills involve derivatives – the complex financial instruments that were the proximate cause of the meltdown. If approved, they would let the biggest banks go on enriching themselves, and endangering the country, with taxpayer–subsidized bets.

Take the Swap Jurisdiction Certainty Act. In the name of simplicity, the bill generally permits the foreign subsidiaries of American banks to follow the derivatives–trading rules of other nations. What the proposal's supporters don't say is that the rest of the world is way behind the U.S. in setting such rules and that a couple of clicks on a computer keyboard is pretty much all it takes for the typical megabank to route a transaction overseas, potentially escaping serious oversight.

[See a collection of political cartoons on the economy.]

This would be a huge loophole. "During a default, risk knows no geographic border," Gary Gensler, chairman of the Commodity Futures Trading Commission, said in a recent speech.

A second bill, the Swaps Regulatory Improvement Act, would undermine Section 716 of the Dodd–Frank financial reform law, which tells banks to segregate their most exotic derivatives transactions from taxpayer–guaranteed deposits. The bill would restore banks' right to conduct these complex and dangerous deals inside units that benefit from deposit insurance and access to Federal Reserve support.
Emphasis added.

Why should Main Street, taxpayers be bailing out all these exotic transactions?  Transactions nobody understands until they seem to fail and want another bailout?  Then they seem to know how much and to whom?

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Disguise is another key element of the strategy. Americans overwhelmingly support tough financial regulation, so the banks have broken their agenda into mini–bills with mind–numbing names like the Business Risk Mitigation and Price Stabilization Act and the Swap Data Repository and Clearinghouse Indemnification Correction Act.

Maybe immigration reform, Benghazi, and the IRS are really a smoke screen for debt slavery?  Elitist gambling?

read more here - http://www.usnews.com/opinion/blogs/economic-intelligence/2013/05/07/financial-services-committee-must-reject-wall-street-derivatives-bills
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All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
they'll end up in your family anyway...
WhiskeyGirl
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« Reply #3 on: May 13, 2013, 09:27:38 AM »

"Swapping bad ideas"

Quote
THE numbers are almost too large to comprehend. The value of one form of derivative traded in America, known as a “swaps contract”, in which counterparties agree to exchange cash flows from two financial products, exceeds $400 trillion. The value of forwards and futures, another set of derivatives in which counterparties agree to transact at a date in the future, is about $24 trillion. The value of the American stockmarket is only $23 trillion.

Little more than a decade ago Hank Greenberg, then the chief executive of AIG, would respond to questions about his firm’s growing derivatives book by scoffing at the notion that size was commensurate with risk. Since AIG’s near-collapse in September 2008, prompted by market fears that it had written more credit-default swaps (CDSs), a form of insurance against default, than it could honour, a dramatic reregulation has unfolded.

read more here - http://www.economist.com/news/finance-and-economics/21576681-big-battle-unfolding-over-even-bigger-market-swapping-bad-ideas

Why haven't they unwound all these bad deals from the taxpayer wallet?

Why aren't they gambling with their own elitist money?

I've read the derivative market is over 1,000 TRILLION dollars.  Who has that kind of money?  How fast can the Fed wish it into existence?

Why isn't derivative trading limited to an imaginary computer gaming platform?

When does it end?
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All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
they'll end up in your family anyway...
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