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September 27, 2008
 
Issue 8  -  Misdirection and Obfuscation

My reading of the headlines and bylines about the "crisis" has led me to believe more and more firmly that the only crisis is for the banks, bankers and other insiders.  That is not to say that there will be no problems for the general public.  There will be, but this "solution" will do nothing to stave off the problems and will allow the elite to make off with billions of dollars, leaving the American people holding the bag.

The Federal Reserve is divided into various regions.  The President of the Dallas Regional bank, Richard Fisher, made a speech.  There was an interesting story on the speech done by Bloomberg.  For the story I am going to cut and past from a web site I recently found (thanks Jimmy) www.fedupusa.com.  Here it is:

 "You have to love this. Here is the story as originally posted on Bloomberg:

"Sept. 25 (Bloomberg) -- Dallas Federal Reserve Bank President Richard Fisher said the proposed $700 billion rescue of financial institutions backed by Fed Chairman Ben S. Bernanke would plunge the U.S. government deeper into a fiscal abyss.

The plan by Treasury Secretary Henry Paulson to buy troubled assets from financial institutions would put ``one more straw on the back of the frightfully encumbered camel that is the federal government ledger,'' Fisher said today in the text of a speech in New York. ``We are deeply submerged in a vast fiscal chasm.''


Now here is how it reads after "Update 1"

"Sept. 25 (Bloomberg) -- Dallas Federal Reserve Bank President Richard Fisher said the U.S. Treasury's proposed $700 billion rescue of financial institutions would be ``a critical first step'' toward calming markets even while adding to the U.S. government's fiscal burden.

The plan by Treasury Secretary Henry Paulson to buy troubled assets from financial institutions ``is an incremental addition to the federal government ledger,'' Fisher said today in a speech in New York. Existing federal obligations in Medicare and Social Security mean ``we are deeply submerged in a vast fiscal chasm,'' he said. "

Hmmm.

The actual speech is here; this is what it says:

"Even before tackling the task of cementing capital adequacy, we need to bear in mind that the TARP places one more straw on the back of the frightfully encumbered camel that is the federal government ledger."

The words "a critical first step" do not appear in the speech. Anywhere. The Bloomberg reporter made them up and removed his actual words about a camel's back."


So we have Bloomberg, owned by Billionaire Michael Bloomberg, changing a Fed President's words from a speech to better enable the passing of a huge bailout.  This is how the elite work.  There are no rules, only money.  Whenever something is being proposed always ask yourself, "Who benefits?"  The beneficiaries here are Wall Street cronies like Bloomberg and Hank Paulson.  They are also trying to change the rules so they can get a way with even more:  

"SEC should not give banks any wiggle room on accounting - WSJ
In a "Heard on the Street" column, the Journal reports that banks are trying to get the SEC to tweak accounting rules so they do not necessarily have to recognize losses that would further dampen their capital position. According to the article, this is just another example of the banks' refusal to face reality in hopes that the markets will eventually rebound. The column goes on to note that the banks do not deserve any wiggle room, as they were the ones that blew it when they made such investments.
Reference Link (subscription required)"

Let's just let them make up the numbers as they go.  There are no rules anymore just abstractions.  White is black and yellow is green.  Then we find out that Washington Mutual was just summarily taken  over by force.  No going through bankruptcy court, no price discovery, just snap, and it's over.  Shareholders wiped out.  Shareholders usually get wiped out, but in this case EVERYONE got wiped out.  Bond holders, preferred share holders and common shareholders were all taken to the cleaners.  Usually the bond holders get to first crack at the remaining money, but not this time.  They are just told tough luck.  America is not supposed to be like this.  America is a free market where capitalism rules.  Not any more.  That seems to be over and if Paulson and his cronies get their way we will never be the same.  

Call your congressman.  It's not too late.  But soon it will be.

"Watch money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion -- when you see that in order to produce, you need to obtain permission from men who produce nothing -- when you see that money is flowing to those who deal, not in goods, but in favors -- when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you -- when you see corruption being rewarded and honesty becoming a self-sacrifice -- you may know that your society is doomed." … Something to Reflect On: Ayn Rand -- circa 1959"