Fact #1: Banks are Insolvent.
The only reason they’re still in business is because they are permitted to value their balance sheet at whatever price they choose. I could privately value my car at $500 TRILLION, but that doesn’t mean I’ll get that price for it when it comes time to sell.
Ditto for the banks and their garbage saturated balance sheets.
Fact #2: Countries are Insolvent
Europe, a union of broke countries, recently announced it is bailing itself out. This is a bit like your bankrupt friend announcing he is gifting himself $1 million: it DOESN’T SOLVE ANYTHING. As I’ve stated time and again, you CANNOT solve a debt problem by issuing more debt.
Fact #3: Wall Street is Crooked
Anyone who even wants to debate this can look at Goldman Sachs’ latest trading results: Goldie made money EVERY SINGLE DAY of last quarter. As if that wasn’t statistically impossible enough, the firm pulled in $100 million+ on 35 out of 63 days. This simply cannot be done ethically. The only way your trading is that good is because you’re cheating (front-running your clients or manipulating the market).
Fact #4: The Central Bankers Cannot “SAVE” Anything
The world’s central bankers are clueless about fixing the debt problems (see Europe). If a private business employed the same tactics as Ben Bernanke and pals, it would be bankrupt. Leaving a paperweight on the “print” button is not a policy. Neither is buying garbage debt (something of NO value) at 100 cents on the dollar. Indeed, there’s a word for someone willing to the latter action; it’s “sucker.”
Fact #5: The Stock Market is Controlled by Computers
The stock market has rallied courtesy of outright manipulation and fraud. Bailout Ben’s money didn’t go to Mom and Pop America, it went to Wall Street where they gunned the stock market higher on next to no volume using algorithmic computer programs to front-run their clients (see Goldman above).
So markets today are not moving based on real investors, they are moving based on computers that trade back and forth in nanoseconds if not faster. These programs were created to reap a ¼ penny profit for each transaction the make (a policy the NYSE created to induce investors to continue trading and provide “liquidity”). However, as last Wednesday showed, when things start to get ugly all these “liquidity providers” seem to vanish in a hurry.
More here.
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With the potential economic implosion of Greece, Spain, Portugal and Italy in the offing, and the ever present Balkan tinder box, I was really amused by the EU “bailout”. One trillion dollars in FIAT money is now on offer, but it comes with a whole lot of concessions. One of the foremost was that every EU member country is now supposed to submit their budget for EU approval. That’s right the democratically elected representatives of sovereign nations are supposed to submit their nations’ balance sheets to the appointed representatives of the EU for approval before they can implement them. As you can imagine the new Prime Minister of Britain used a very blunt Anglo-Saxon term to decline the honour. Sweden was marginally more polite in saying “no”.
Along the same line Germany’s offer to assist Greece is a political time bomb given the ethnic (not touching religious) origin of most of its guest workers. All those joyful Turks are not too happy with the idea that their tax dollars are going to bailout their old enemy Greece. Not to mention that the amount suggested as a bailout may destabilize Germany’s economy.
I disagree with “Fact #4: The Central Bankers Cannot “SAVE” Anything”
The assumption is that they would if they could and that saving their country is the goal. It is not. They are not clueless, they know exactly what they are doing. The central banks’ policy is to manage the financial system so their clients make money. And their clients are banks.
Kind of unrelated but this is a very important 3 minute video to watch, it is truly unbelievable!
http://www.wimp.com/copymachines/
These “facts” are presented with little argument or substantiation (for example, the claim that profits per se demonstrate the criminality of Goldman Sachs’s financial dealings). Some people are crooked, some investors are crooked. I wouldn’t say that by their very nature all people are crooked or that all investors, or all professional investors (a.k.a. “Wall Street”) are crooked. Even where I might partially agree with some of the assertions in the post, its claims are too flimsy and generalized to be accorded the dignity of the appellation “facts.”
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