The Mother Of All Frauds

[Random Walk]

Here is an interesting review of the U.S government bailout proposal of the financial mess.


"LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY
TO PURCHASE MORTGAGE-RELATED ASSETS

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them"


http://market-ticker.denninger.net/archives/587-The-Mother-Of-All-Frauds.html

[alpine-frolic]

Why do we let our democracies become a tool used by some to steal all the others?
Nothing, no one is perfect, some are only more unperfect ...

[Sveta's Hero]

NP, you haven't changed a bit.

[RiverRock]

Obviously something is very wrong. First the secret, privately owned Federal Reserve took control of U.S. money supply from congress in 1913 to benefit greedy bastards at the expense of the American people.

Now with the backing of federal reserve (who manipulates everything in the first place and CAUSED this disaster) the government is "buying" the entire banking, insurance, and mortgage financial system of the U.S for billions even trillions of dollars.

[Lucker]

I do not see any plan that spells out matters in detail as representing "The Mother of All Frauds"
The government is protecting the system at all costs and only a moron would argue for something that is otherwise .
Until someone suggests a better way of protecting the system , congratulations all round are reasonable .
The system may be poisoned , Nicey , but why not try to save as much as possible without giving the whole planet a dose of a more than nasty virus ?
Do nothing and there would have been meltdown . There still might be , but at least these actions are aimed at easing liquidity and instilling lending confidence .

[alpine-frolic]

Do we must save the soldier Ryan?

[alpine-frolic]

I do not see any plan that spells out matters in detail as representing "The Mother of All Frauds"
The government is protecting the system at all costs and only a moron would argue for something that is otherwise .
Until someone suggests a better way of protecting the system , congratulations all round are reasonable .
The system may be poisoned , Nicey , but why not try to save as much as possible without giving the whole planet a dose of a more than nasty virus ?
Do nothing and there would have been meltdown . There still might be , but at least these actions are aimed at easing liquidity and instilling lending confidence .

Let us enter in a new world, let the old die in peace, its time is gone.

[Lucker]

Shut up you silly Crackpot .
If you want to be ruled by those Chinese or the supine Russians , go and live there .

[Random Walk]

Obviously something is very wrong. First the secret, privately owned Federal Reserve took control of U.S. money supply from congress in 1913 to benefit greedy bastards at the expense of the American people.

Now with the backing of federal reserve (who manipulates everything in the first place and CAUSED this disaster) the government is "buying" the entire banking, insurance, and mortgage financial system of the U.S for billions even trillions of dollars.


The author of the webbsite has added a Youtube video where he is commenting on the statements of treasury secretary Paulson. Watch it!

Interestingly enough, Paulson a former executive at Goldman Sachs was one of the architects behind the business of morgage related bonds. Listen to what the author of the website has to say about Paulson.

[Random Walk]

Do nothing and there would have been meltdown . There still might be , but at least these actions are aimed at easing liquidity and instilling lending confidence .


The fat cats get rich at the expense of the little guy, and when the fat cat is in financial trouble, he gets bailed out by the top-brass at the government. That's how it works.

Who gets the bill? The taxpayer who did not have anything to do with it.

[kentuckydan]

The fat cats get rich at the expense of the little guy, and when the fat cat is in financial trouble, he gets bailed out by the top-brass at the government. That's how it works.

Who gets the bill? The taxpayer who did not have anything to do with it.


In this country, the "Little guy " if you are figuring the bottom 50% of the country
doesn't pay that much tax, maybe 4-6% of all Personal Income Tax collected

The lowest 20% ends up with what one might term a Negative Tax in that
for every dollar collected in Tax from them, they get about three dollars
in real cash outlays from the Federal Government

So neither group is going to "bail out" anyone.

What income level do YOU consider as the "little guy"???

[kentuckydan]

BTW a large part of the subprime crises can be laid at the Feet of the Community Reinvestment Act, which mandated for reasons of inclusion and diversity that
lending institutions give subprime/bad loans to people with not so great credit ratings

It was a modern day mortgage version of Rome's Bread and Circuses.

Which is why when there were some Conservatives brave enough to try
to take on and clean up Freddy Mac and Fanny Mae, the efforts got
blocked by Progressive Democrats and Cowardly Republicans

[1amongmany]

"In this country, the "Little guy " if you are figuring the bottom 50% of the country
doesn't pay that much tax, maybe 4-6% of all Personal Income Tax collected"

in what country?? if you are refering to the total amount paid by the little guy towards the national budget then you might have a case but it hurts the little guys to pay taxes more than the big guys because they are able to get the loopholes made by the government

[huney]

In this country, the "Little guy " if you are figuring the bottom 50% of the country doesn't pay that much tax, maybe 4-6% of all Personal Income Tax collected

The lowest 20% ends up with what one might term a Negative Tax in that
for every dollar collected in Tax from them, they get about three dollars
in real cash outlays from the Federal Government

Dan, it does not seem reasonable to limit your argument to income taxes. That is only the tip of the tax-berg.

The price paid for every item we purchase contains federal, state and local taxes paid on the raw materials sold to the manufacturer, the energy consumed in it's manufacture, the payroll of the workers who assembled it, on the building it was made in, on the property that building sits on (add again if the item was ever in a warehouse), on the truck that delivered it, on the fuel the truck burned, the trucking company's facilites and payroll, the fuel station's building, property and payroll, and the oil company's facilites and payroll, on the store's building and property and payroll, ad infinitum, ad nauseum.

In short, the "little guy" pays a lot more than the "big guy" as a percentage of income simply because he spends a greater portion of his income on products and services.

Further, IMO, it is extremely difficult to support the argument that the "big guy" really pays any taxes at all due to the fact that he, in the end, passes on the cost to his customers.

How does that boil down in terms of proportionate funding of federal, state or local budgets? It seems to me that the "little guy" is paying the whole bill -- as it should be in a capitalist society.

[RiverRock]

Amen huney!!! Saying the little guy in this country doesn't pay that much tax is very misleading. The top 20% just has what the little guy (the bottom 80% of the country) pays indirectly in sales tax, excise taxes, capital gains tax, inflation and all kinds of schemes.

[kentuckydan]

Dan, it does not seem reasonable to limit your argument to income taxes. That is only the tip of the tax-berg.

The price paid for every item we purchase contains federal, state and local taxes paid on the raw materials sold to the manufacturer, the energy consumed in it's manufacture, the payroll of the workers who assembled it, on the building it was made in, on the property that building sits on (add again if the item was ever in a warehouse), on the truck that delivered it, on the fuel the truck burned, the trucking company's facilites and payroll, the fuel station's building, property and payroll, and the oil company's facilites and payroll, on the store's building and property and payroll, ad infinitum, ad nauseum.

In short, the "little guy" pays a lot more than the "big guy" as a percentage of income simply because he spends a greater portion of his income on products and services.

Further, IMO, it is extremely difficult to support the argument that the "big guy" really pays any taxes at all due to the fact that he, in the end, passes on the cost to his customers.

How does that boil down in terms of proportionate funding of federal, state or local budgets? It seems to me that the "little guy" is paying the whole bill -- as it should be in a capitalist society.

Well first we do have to define the term little guys don't we? Like I said the bottom 20% get 3 dollars back for every dollar they pay in.

Now you do have a valid point about "hidden taxes" a perfect example is Corporation Taxes.

The Democrats like to the Little Guys and Gals of this country how they are soaking the Rich Corporations. and as you correctly pointed out if I understood you, Corporations

DON'T PAY TAXES


We do, in higher costs of goods, l.ess jobs because it makes us less competitive on the World market etc

Just another sneaky way of Sticking it to the hard workers of this country while patting them on the back and telling them they are looking out for them

Capital gains taxes? For every capital gains tax declared on personal income taxes there are NINE middle class families also posting capital gains,

What's the difference? When Capital Gains Taxes are High, the Rich don't divest and therefor pay nothing. A middle Class family usually divests because they NEED the
money for some reason.

So when one Party screams that lowering or not raising Capital Gains is "giving" something to the Rich?

They are saying we would rather stick it to 9 working families than take a chance of one Rich Dude keeping more of his or her own money.

Because lowering taxes is not GIVING anyone anything it is letting them keep what was already theirs.

We cannot fait accomple wave a magic wand and eliminate Corporate Taxes, but IMO it would be better for the Country and the People if we phased them out

I can hear the Left screaming like stuck pigs if it were ever suggested though

I think IMO that one problem is that many folks are stuck in a Medieval Concept of Wealth.

It is no longer the case that the Lord sits in a Manor with Gold, Silver and Precious Gems in a Strong Room while the Peasants working the Fields Starve

Vast fortunes are INVESTED in the General Economy, its what you borrow when you need a Car Loan, House Loan etc, it's what's what is used to build factories, expand existing ones, create jobs.

If you jerk those funds out of the economy and give them to the Federal Government, guess what happens to interest rates and job creation??

[huney]

Well first we do have to define the term little guys don't we? Like I said the bottom 20% get 3 dollars back for every dollar they pay in.

Let's just assume for the sake of argument that the little guys are the bottom 20% of dollars paid in personal income tax. The assertion that they get $3 for every $1 they pay is fuzzy logic unless you insist on a calculation based only personal income tax. Entitlements are not funded solely by the personal income tax. We cannot measure the real amount paid toward taxes so we cannot say what the percentage returned may be.

Until we toss out all tax code of any kind, at every level of government, and implement one transparent tax (for example, a flat tax paid at the same percentage on all income with no deductions, credits, or rebates to any), no voter/taxpayer will ever know the true cost or benefit of the fiscal policies of either party.

Yes, Joe Everyman will scream bloody murder at a twenty or thirty percent income tax, but he will also reap the benefit in lower prices everywhere else.

[fbibob]

I do not see any plan that spells out matters in detail as representing "The Mother of All Frauds"
The government is protecting the system at all costs and only a moron would argue for something that is otherwise .
Until someone suggests a better way of protecting the system , congratulations all round are reasonable .
The system may be poisoned , Nicey , but why not try to save as much as possible without giving the whole planet a dose of a more than nasty virus ?
Do nothing and there would have been meltdown . There still might be , but at least these actions are aimed at easing liquidity and instilling lending confidence .


The issue is not if the system needs to be fixed or replaced. But they are saying the man who spends the money cannot even have his actions examined by any legal body - Congress or the courts. And they are handing him a check for (potentially) $700 billion dollars. That's more than I make in a month!

[zoroooo]

a few years ago after one of thoose chrashes an hongarian american George Soros was asked how he felt having lost more than 200 miljon dollors in a morning.....His answer was."its only paper monney"


zorozoro

[huney]

The issue is not if the system needs to be fixed or replaced. But they are saying the man who spends the money cannot even have his actions examined by any legal body - Congress or the courts. And they are handing him a check for (potentially) $700 billion dollars. That's more than I make in a month!

Not only are they handing him a check for (potentially) $700b, they are going to have to build a whole new bureaucracy to administer the bail out -- just as they did with the savings and loans in the 80's -- and to finance all that at what rate of interest??

IMO, it would be cheaper in the long run if we all contributed $2500 per person to buying out the whole lot of them. Imagine the entertainment to be had flushing all that bad paper down our respective toilets.

I do not understand what fault a legal body could find other than stupidity. On that charge I could applaud a verdict of guilty followed by a sentence of life at hard labor cleaning out the sewers.

Next, how to deal with the idiots who bought houses with adjustable mortgages at sub-prime rates. What could they have been thinking? My guess is that they were not.

[statajack]

Not only are they handing him a check for (potentially) $700b, they are going to have to build a whole new bureaucracy to administer the bail out -- just as they did with the savings and loans in the 80's -- and to finance all that at what rate of interest??

IMO, it would be cheaper in the long run if we all contributed $2500 per person to buying out the whole lot of them. Imagine the entertainment to be had flushing all that bad paper down our respective toilets.

I do not understand what fault a legal body could find other than stupidity. On that charge I could applaud a verdict of guilty followed by a sentence of life at hard labor cleaning out the sewers.

Next, how to deal with the idiots who bought houses with adjustable mortgages at sub-prime rates. What could they have been thinking? My guess is that they were not.

But there are only 87 people left who have $2,500 or more. The rest have already been flushed down the S-bend. :cool:

[huney]

But there are only 87 people left who have $2,500 or more. The rest have already been flushed down the S-bend. :cool:

You may have a point there ;)

Perhaps we should issue some more loans...

[1amongmany]

You may have a point there ;)

Perhaps we should issue some more loans...

or ask Buffet to pitch in $5 billion :cool:

[huney]

or ask Buffet to pitch in $5 billion :cool:

Sorry, still not enough. Suppose Soros and Gates could kick in $10b each?

[Lucker]

I am a reductionist . So ....
Do not support the infrastructure and the house falls down .
This house happens to be the US Empire .

Support the infrastructure and it might just stand up .
It is irrelevant what you use to support the infrastructure , including taxpayers so called money .

[Rileymat]

BTW a large part of the subprime crises can be laid at the Feet of the Community Reinvestment Act, which mandated for reasons of inclusion and diversity that
lending institutions give subprime/bad loans to people with not so great credit ratings

It was a modern day mortgage version of Rome's Bread and Circuses.

Which is why when there were some Conservatives brave enough to try
to take on and clean up Freddy Mac and Fanny Mae, the efforts got
blocked by Progressive Democrats and Cowardly Republicans


Regarding Fannie Mae and Freddie Mac, who appointed the Chief Executive Officers (CEOs)? Why, it was Bill and Hillary Clinton--crooks themselves. I don't know the millions Johnson made, but Raines took away something like 92 million (and had to pay back some 25 mil?), Jamie Gorelick (the Vice. walked away scot-free with 75 mil). Unfortunately, there has been no legal limit on the income to be made by the CEOs and their underlings of Fannie Mae and Freddie Mac, but let's face it, these people were crooks and were looking out for themselves at the expense of their organzations and the American Taxpayers. The Bubble Burst. And. oh yes, Chairman of the Senate Banking Committee, Chris Dodd (Democrat-Connecticut), received some loan favors from them himself, and Barny Frank (Democrat-Massachusetts), of the House Banking Committee, blocked proposed regulatory measures (even those requested by President Bush) and investigations to see what was going wrong in those organizations. As Dan implies, the real problem came about when the Democrat-controlled Congress insisted on lending practices favorable to "multiculturalism--i.e., Race" (Sub-Prime Bad Risk Loans) and then the floodgates of the system were opened up, the greedy were allowed to do their dirty work across the board--to include the Investment Firms on Wall Street.

[huney]

Regarding Fannie Mae and Freddie Mac, who appointed the Chief Executive Officers (CEOs)? Why, it was Bill and Hillary Clinton--crooks themselves. I don't know the millions Johnson made, but Raines took away something like 92 million (and had to pay back some 25 mil?), Jamie Gorelick (the Vice. walked away scot-free with 75 mil). Unfortunately, there has been no legal limit on the income to be made by the CEOs and their underlings of Fannie Mae and Freddie Mac, but let's face it, these people were crooks and were looking out for themselves at the expense of their organzations and the American Taxpayers. The Bubble Burst. And. oh yes, Chairman of the Senate Banking Committee, Chris Dodd (Democrat-Connecticut), received some loan favors from them himself, and Barny Frank (Democrat-Massachusetts), of the House Banking Committee, blocked proposed regulatory measures (even those requested by President Bush) and investigations to see what was going wrong in those organizations. As Dan implies, the real problem came about when the Democrat-controlled Congress insisted on lending practices favorable to "multiculturalism--i.e., Race" (Sub-Prime Bad Risk Loans) and then the floodgates of the system were opened up, the greedy were allowed to do their dirty work across the board--to include the Investment Firms on Wall Street.

Do you mean to imply that Sub-Prime Bad Risk Loans were yet another form of Affirmative Action?

I would be very interested in seeing (and have yet been able to find) statistics as to the literacy rate of the individuals granted these types of loans. If the contention is made that the greater percentage of illiterates are people of color, please move to the thread on education. Otherwise, read on.

No one can sell without buyers. No one capable of reading the LARGE print on an ARM keyed to the prime lending rate could possibly have been doing anything other than gambling on a change in their personal economic situation. There was nowhere for the interest rate to go but up. Unless I miss my guess, God is not in the business of gifting 20-30% wage increases and it is my opinion that no one less than God could have bailed these people out.

The first words taught to me in Latin class were: Caveat Emptor.