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Thread: End Game....Economic/Political Crisis

  1. #11
    A setup for sure by Central Bankers

  2. #12
    2012 is going to be a wild roller coaster ride thanks to the European debt crisis pushing it over the edge finally. If Americans knew how much US money has been sent over there and the amount in credit swaps they'd riot. And it will not work. The market is down today and will trend down for a good while. Everyone is sitting in cash that can. The dollar is going to climb for a while, but don't get any crazy ideas. I expect to see the DOW in the 9000's next year.
    The good news is just like the market did in the 1930's we will likely see it turn around and climb despite the economy as much as 300%.
    It's all just nuts.

  3. #13
    The reason behind my idea is the rising uncertainty in the banking system. There no longer is any reason to be overly confident that you will have continuous access to the money in your bank account. So it would be good to have cash available for at least some period of time, a week, maybe even a month, when other means, debit cards, credit cards, may be of limited use.

    For many, if not most, this may -still- sound like a far out or far away scenario. And I'm not saying it absolutely WILL happen. And I have no secret inside information. Nor do I have the intention of unnecessarily scaring people. But things being what they are and where they are, I do think it's appropriate for The Automatic Earth to encourage people to think beyond the idea that no such thing could ever happen.

    In this excellent video, Kyle Bass argues a point that I think we should all be aware of. Namely, that governments don't forewarn of drastic measures, if only because they can't really do that. They will always insist that all is well until it is not, or they would risk causing a stampede. The take away from that insight at this point is that we can't feel safe because our governments - or the main media that move in lockstep with them- haven't warned us.

    We will need to inform ourselves.
    http://theautomaticearth.blogspot.co...christmas.html








  4. #14
    Where Is The Volcker Rule?
    By Simon Johnson

    Three years ago, a financial crisis threatened to bring down the United States economy – and to spread economic disaster around the world. How far have we come in preventing any kind of recurrence? And will the much-discussed Volcker Rule – attempting to limit the risks that big banks can take – play a positive role as we move forward?

    Bad loans were the primary cause of the 2007-8 financial debacle. When the full extent of the problems with those loans became apparent, there was a sharp fall in the values of all securities that had been constructed based on the underlying mortgages – and a collapse in the value of related bets that had been made using derivatives.

    The damage to the economy became huge because these losses were not dispersed throughout the economy or around the world. Rather, many of the so-called “toxic assets” were held by the country’s largest banks. Financial institutions that used to lend to consumers and businesses had instead become drawn into various forms of gambling on the booming mortgage market (as well as on commodities, equities and all kinds of derivatives). “Wall Street gets the upside, and society gets the downside” was the operating principle.

    And what a downside that proved to be. Treasury Secretary Henry Paulson said the Troubled Asset Relief Program, or TARP, was needed to buy those toxic assets from the banks. But this quickly proved unwieldy, so TARP pumped roughly half a trillion dollars into bank equity. The Federal Reserve backed this up with a massive amount of “liquidity” through more than 21,000 transactions.

    The additional government debt as a direct result of this finance-induced deep recession is estimated by the Congressional Budget Office at around 50 percent of gross domestic product, roughly $7 trillion.
    These are staggering numbers. And this system of big banks taking outsized risks, failing and imposing huge damage on the rest of us has to stop. This ball is now firmly in the regulators’ court.

    Whatever your broader issues with the Dodd-Frank Act of 2010, one point about legislative intent in this legislation is clear: the regulators have the authority to cut banks down to size and return them to their historical role of intermediating between savers and borrowers.

    As for size, the regulators have long ignored the existing guidelines and allowed the biggest banks to get bigger. We need to go in the opposite direction, and that includes cutting the private mega-banks, as well as Fannie Mae and Freddie Mac, down to size. It also means taking advantage of the resolution authority and all associated provisions that Sheila Bair, the former chairman of the Federal Deposit Insurance Corporation, worked so hard to put into the Dodd-Frank Act.

    As Jon Huntsman is arguing on the Republican campaign trail, too-big-to-fail banks simply need to be forced to break themselves up.
    But we also need to make the mega-banks less likely to fail. The easiest way to do that would be to require banks to have enough common equity to absorb losses.

    But the bankers have pushed back hard, with Jamie Dimon, head of JPMorgan Chase, leading the way with statements such as this on capital requirements, which are known loosely as the Basel Accords: “I’m very close to thinking the United States shouldn’t be in Basel any more. I would not have agreed to rules that are blatantly anti-American.”

    Dan Tarullo, responsible for this issue on the Federal Reserve Board, seems to support the idea of requiring significantly more equity in big banks, perhaps moving in the direction recommended by Anat Admati and her colleagues. But Mr. Tarullo appears to have lost that battle for now.
    If we are not breaking up banks and if we are not requiring them to have reasonable levels of capital (thus limiting how much they can borrow relative to their equity), we must use all other available tools to stop the too-big-to-fail banks from taking excessive and ill-conceived risks.

    This is where the Volcker Rule becomes so important. Named for Paul A. Volcker, former chairman of the Federal Reserve, and adopted as part of Dodd-Frank at the insistence of Senators Jeff Merkley, Democrat of Oregon, and Carl Levin, Democrat of Michigan, the Volcker Rule directs the regulators to get banks out of the business of betting on the markets.

    END part 1

    http://baselinescenario.com/2011/12/...line+Scenario)

  5. #15
    PART 2

    The regulators are now determining how they plan to implement it. Draft proposals are currently open for comment.
    But the latest news on this front is not encouraging, as key regulators seem stuck in a “bigger is better, and anything goes for the biggest” mindset.
    The Volcker Rule has some good points, including a requirement that trader compensation not be tied to speculative risk-taking, and that firms collect and report some essential data to regulators. But the current draft does too little to actually stop the banks’ current risky practices.

    The main problem is that the rule as drawn does not set out the clear, bright lines that banks and regulators need, nor does it provide for meaningful enforcement. Instead of drawing the lines, the proposed rule mandates that firms write many of the rules themselves.

    There is some good news. At this point, it is only a proposed rule, and it is open for comment (submit a comment here). Organizations like Better Markets that promote the public interest within the regulatory process will be in there fighting to strengthen the proposed rule and make the final rule better.
    Everyone who cares about real financial reform should do the same, but the regulators’ draft rule has made it harder to uphold the public interest than should have been the case. For example, the regulators ignored the breadth of the Volcker statute and focused instead only a narrow slice of the bank’s balance sheet – just what the bank says is for “trading” purposes. Much else of what big banks do seems likely to escape scrutiny.

    The regulators also have given very little guidance on conflicts of interest, on what should be considered high-risk assets or on what high-risk trading strategies should be permitted.

    During a Senate hearing at which I testified last week, Senator Bob Corker, Republican of Tennessee, focused on another important problem – the lack of any restrictions on trading in the enormous Treasury securities market. The regulators will create a lot more paperwork for the banks, but if the current draft is adopted, the too-big-to-fail banks are not likely to be forced to stop doing much.
    Last year Senator Levin said:
    “We hope that our regulators have learned with Congress that tearing down regulatory walls without erecting new ones undermines our financial stability and threatens our economic growth. We have legislated to the best of our ability. It is now up to our regulators to fully and faithfully implement these strong provisions.”
    From what we’ve seen so far, our regulators have not yet understood this message. They seem instead more in tune with Mr. Dimon, who insisted earlier this year that regulators should back away from any effective implementation of the Volcker Rule:
    “The United States has the best, deepest, widest, most transparent capital markets in the world which give you, the investor, the ability to buy and sell large amounts at very cheap prices. I wish Paul Volcker understood that.”
    Mr. Dimon — who is on the board of the Federal Reserve Bank of New York — seems to have forgotten the financial crisis, its impact on ordinary Americans and the utter fiscal disaster that ensued. Or perhaps he never noticed.



    http://baselinescenario.com/2011/12/...ne+Scenario%29

  6. #16
    Video Explanation Of How The ESM Is Europe's Uber-TARP On Steroids



    Submitted by Tyler Durden on 12/19/2011 18:07 -0500
    Three years ago, Congress balked at the mere thought of giving Hank Paulson's (so lovingly portrayed in Andrew Ross Sorkin's straight to HBO Too Big To Fail) proposed TARP, which came in an "exhaustive" 3 page term sheet with limited bailout powers however with virtually unlimited waivers and supervision, and voted it down leading to one of the biggest market collapses in history. Curiously, a more careful look through Europe's €500 billion (oddly enough almost the same size as America's $700 billion TARP) European Stability Mechanism or ESM, reveals that in preparing the terms and conditions of the ESM, Europe may have laid precisely the same Easter Egg that Paulson did with TARP, but failed. Because at its core, the ESM is like a TARP... on steroids.

    It is a potentially unlimited liquidity conduit (only contingent on how much cash Germany wants to allocate to it - which in turn means how much cash Germany is willing to let the ECB print), with no supervisory checks and balances embedded, and even worse with no explicit or implicit liability clauses - in essence it is a carte blanche for its owners to do as they see fit without any form of regulation.


    As the following brief but must watch video explains, the ESM "is an organization that can sue us, but is immune from any forms of prosecution and whose managers enjoy the same immunity; there are no independent reviewers and no existing laws apply; governments can not take action against it? Europe's national budgets in the hands of one single unelected intergovernmental organization? Is that the future of Europe? Is that the new EU? A Europe devoid of sovereign democracies?" Ironically even America's feeble and corrupt Congress stopped a version of TARP that demanded far less from the taxpaying citizens. Yet somehow, Europe has completely let this one slip by. Is it simply to continue the illusion of the insolvent Walfare State for a continent habituated by zombifying socialism, or is Europe by now just too afraid and too tired to say anything against its eurocrat class?

    One thing is certain: when the people voluntarily give up on democracy, out of sheer laziness or any other reason, the historical outcomes are always all too tragic.







    http://www.zerohedge.com/news/video-...-tarp-steroids

  7. #17

  8. #18
    Quote Murmur:"The Tea Party and the OWS are not really all that different".
    .................................................. .................................................. .................................................. ...........

    I totally disagree with your assertion!! The "Tea Party" and the OWS are as different as is the night to day!!! There is no real similar comparison, neither foundationaly, nor in intent, nor in action. NOTHING to compare, except both involves groups of people. The OWS is an embarrassment to most Americans, and a lot of them have landed in jail, through the many weeks of their terrorizing the various communities. Acorn has done a good job of keeping the Occupiers going, but in many many cases the OCS has devastated many many small to medium businesses in the various Occupy areas, to include their having to lay-off employees. Yes, that sounds just great, right?? One of the sad things, is, many of the OCS people don't work anyway, so what do they care if somebody gets laid off??

    The laxness of the Mayor of New York is the only reason this Occupy crap was able to rise even to a false level of genuineness, that and the POTUS encouraging it, rather than condemning it for what it really is - a "get out and break the laws of our cities", with public defecation on car hoods, urinating everywhere, rapes, terrorizing small shop owners, making a mess or destroying public places, and on and on and on, and even to blocking various shipping processes.

    I say, that from an American values standpoint, The Tea Party should be given the Medal Of Honor (civilian equivalent), and the OWS needs to be pretty much jailed for their crimes, as they are being committed!!! Former NYC Mayor Rudy Giuliani said he would have shut down the OWS right away! Too bad Mayor Bloomberg didn't have the management ability to handle that! Obama does pretty much get the blame for starting the OWS anyway, and that will come back to haunt him!

  9. #19
    People have a right to protest, people have a right to assemble.

    Both the tea party and OWS are angry and fed up with politics as usual.

    Both are upset that politicians represent special interests which provides funding for their political campaigns.

    The Elites and their media shills have successfully spilt the malcontents into left vs right.....dividing the malcontents along republocrat lines.
    They aren't the same, but they aren't that different either.

    They are both frustrated with politics in America.

  10. #20
    The Tea Party was born out of the opposition to Wall St Bailouts...Tarp to be exact.

    OWS also has a problem with Wall st obviously.

    Can you not see how the Republocrats have divided and split this anger for there own agenda's?

    The real problem is the Federal Reserve....there would be no bailouts and Wall st would not have the power and influence over politics without the Federal Reserve backing them.

    Don't fall for the misdirection.

    Bush had Paulson...Obama has Geithner. Very little difference at all.

    Republicans and Democrats are still pushing what the elites want....and through the media shills they try to paint a picture that they are very different.


    But on the real issues....like the POLICE STATE America has and is becoming...they are no different.

    Look at the votes.....Patriotic Act...the recent NDAA....and tell me what's different?

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