02/08/2010 10:35:08 PM EST

Wall Street Coup

posted by sisco66

We have all been told that bank bailout was necessary to save the world economy from collapsing. However, very few banks have been bailed out. In fact, I am not sure if any traditional "banks" have been bailed out, only Wall Street firms and conglomerates.

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What really happed was that Goldman Sachs, lead by Henry Paulson and aided by Ben Bernanke, Chris Cox, Tim Geithner and Jamie Dimon, manipulated short selling and Mark to Market rules to create a bank run on both stock pieces and deposits. Some of the larger victims, taken down were Lehman, Behr Sterns and Washington Mutual. That was of course after packaging hundred of billion in shit CDO’s and manipulating the price of oil.

Then Paulson and Berna nke used the crises to put a gun to the heads of our elected officials in closing days of a Presidential election. The outcome has been record profits for Goldman Sachs and hedge fund insiders.
Not only have the banks not been bailed out, or the underlying crises addressed, the FDIC is still raiding banks and stealing their assets as millions more homes go into foreclosure.
In short, not only did we not need the “bank bailout”, since no banks were in fact bailed out, the entire crises was created by rule changes, short selling and Fed rate manipulation. If we wanted to re-inflate the housing bubble, or at the very least stop the free fall in value, allowing large scale refinancing would have saved all the “real banks” leaving the CDO and CDS issuers and holders responsible for the margin on rates.

Do you think Keith Oberman and Rachel Maddow will ever pick up on this?


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Wall Street Coup | 19 comments (19 topical, 0 hidden)
No, they wont... (none / 0)
Because they sure as Hell aren't going to bite the hand that feeds them - those houses in the Hamptons are expensive, you know...

Plus quite frankly what you are proposing is too complicated to spell out and prove, so people aren't going to understand it, let alone buy it from the media...

When are YOU going to understand that all of this is just one large "patrician" shell game that we are never going to be invited to play in? TV media isn't concerned with the truth - they are concerned with ratings and revenue, just like everyone else!

Truth be damned...

by bobo1 on 02/09/2010 03:36:00 AM EST

simple version (none / 0)
My bro bo,

The banks and bankers were not bailed out, only Wall Street.

The nuts and bolts may be complicated, but the underlying issue is not. We went from a housing and oil crises to a Wall Street bailout.  This was the greates grift of all time.

by sisco66 on 02/09/2010 06:05:24 AM EST

[ Parent ]
Yet,... (none / 0)
...you continue to support the sham ideology that promotes the policies and practices that you criticize.  You call yourself a conservative, but "conservatives" and libertarians other supporters of corporatism are the ones who allow this shell game that is designed to funnel our money up to the richest handful of people in society.  And with valueless (in more ways than one) educators like you continually dumbing down our educational system with your prejudices and ignorance, there is little hope that the voters will gain the understanding they need in order to see what is being done to them.

I keep telling you, Bob: you are the actual problem with our society.  You complain and complain and complain, except when you need a reason to feel good about yourself, and then you set up others so that you can criticize them from an utterly stupid point of view.  And you never do anything that could actually help make our society a better place because that would mean realizing that you can't do it alone and that everyone has to benefit before you can.

And that is something that you just can't tolerate because, like other conservatives, you think you're special.


The world is a strange place, but that makes it really fun to watch. -- bfaul

by EveningStarNM on 02/09/2010 10:04:00 AM EST

[ Parent ]
LOL (none / 0)
Why do you take him seriously. Bobo1 is never sincere in what he posts here on the Forum. He loves playing with people's emotions ... by perpetually playing the phony concern card.

A Proud Progressive!!!

by teron678 on 02/09/2010 10:16:08 AM EST

[ Parent ]
I take Bob seriously... (none / 0)
...because he is a public school teacher who does actual damage to his students.  Bob is part of the problem with our country, and he must be taken seriously so that we can fix our problems.


The world is a strange place, but that makes it really fun to watch. -- bfaul

by EveningStarNM on 02/09/2010 10:57:39 AM EST

[ Parent ]
I teach my kids about... (none / 0)
How the real world (the world that they live in) works. Its not always pretty, but facts are facts...

You on the other hand would teach idealism like "Hope" and "Peace" and "Harmony", ideals that only exist in the minds of Liberals and their very limited grasp on how the real world operates.

I would not be a good teacher if I taught my kids that "Peace will guide the planets, and love will steer the stars etc." Its my jobs to show them what they are up against and to provide them with the tools necessary to be successful.

That's why I teach, and that's why people like you sit behind computers all day away from the general public. I would invite you to come out into the real world, but I don't think your feeble soul could handle it at this point...

:)

by bobo1 on 02/09/2010 12:52:17 PM EST

[ Parent ]
your lack of ingenuity is overwhelming (none / 1)
Do you also teach 'your kids' how to sort out the coal at the end of a coal-chute, because that was the "real world" before progressive reformers fought fuckers like you to give them the hope of a future? You are such a complete skin full of swill that I will merely put an excerpt here for you to learn from.

"Forms of child labor, including indentured servitude and child slavery, have existed throughout American history. As industrialization moved workers from farms and home workshops into urban areas and factory work, children were often preferred, because factory owners viewed them as more manageable, cheaper, and less likely to strike. Growing opposition to child labor in the North caused many factories to move to the South. By 1900, states varied considerably in whether they had child labor standards and in their content and degree of enforcement. By then, American children worked in large numbers in mines, glass factories, textiles, agriculture, canneries, home industries, and as newsboys, messengers, bootblacks, and peddlers.

In the early decades of the twentieth century, the numbers of child laborers in the U.S. peaked. Child labor began to decline as the labor and reform movements grew and labor standards in general began improving, increasing the political power of working people and other social reformers to demand legislation regulating child labor. Union organizing and child labor reform were often intertwined, and common initiatives were conducted by organizations led by working women and middle class consumers, such as state Consumers’ Leagues and Working Women’s Societies. These organizations generated the National Consumers’ League in 1899 and the National Child Labor Committee in 1904, which shared goals of challenging child labor, including through anti-sweatshop campaigns and labeling programs. The National Child Labor Committee’s work to end child labor was combined with efforts to provide free, compulsory education for all children, and culminated in the passage of the Fair Labor Standards Act in 1938, which set federal standards for child labor."
http://www.continuetolearn. uiowa.edu/laborctr/child_la bor/about/us_history.html
minerchildren

You regressive asshats don't even know what the fuck you are talking about. You soo take for granted the way things are now. As if its the way they've always been. What are you, a millionaire teacher? If not then you do not stand to benefit from the feudalistic society that you seem to yearn a return to. How do you think change happens? Someone somewhere hopes for something better and then sets about trying to get bumps on logs like you out the fucking way. If it were up to you no-nothings, humans would all still be living in caves and howling at the moon for want of food and water.

You and your people lack the imagination to build a better world and despise others who would venture to do so. You crave the dark ages when christianity was the law of the land and science was mere hocus-pocus. 'Be afraid to go into the woods at night'. 'Don't walk too far lest ye fall off the edge of the earth'. This is your nostalgia.

by mauirising on 02/09/2010 01:59:14 PM EST

[ Parent ]
Actually, Bob... (none / 0)
...I'd teach them logic, how to reason, how to examine an idea to find out if it's a true reflection of reality.  I would teach them about rigor, and about how prejudice gets in the way of solving problems. I would teach them to think rationally, Bob, which is something that, with your unconcealed hatred and bigotry and self-pity, you are unable to teach.


The world is a strange place, but that makes it really fun to watch. -- bfaul

by EveningStarNM on 02/09/2010 03:05:59 PM EST

[ Parent ]
Rationality and logic... (none / 0)
Are wonderful tools to have as a learner - too bad that those traits are inherent to the individual and rarely can be instilled or taught to the common individual...

You can help a kid reach their maximum potential and to aspire to be something great, but you can't make them achieve it. You can't make them think logically - they either pick up on it early in life, or they just don't see it...

I'm so glad you don't work in schools, Star...

by bobo1 on 02/09/2010 03:14:18 PM EST

[ Parent ]
Bullshit (none / 0)
No one is born knowing how to use logic.  It's a learned skill.  It's mathematical, and it's got rigorous rules that, like any language, must be taught.

And that's what you don't understand.


The world is a strange place, but that makes it really fun to watch. -- bfaul

by EveningStarNM on 02/09/2010 05:24:37 PM EST

[ Parent ]
Its not all about logic... (none / 0)
Its about the students mental capacity and their ability to accumulate and relate knowledge.

Most people are not "wired" to take in great amounts of learning. Basically, most people are not Rhodes Scholars.

Every student has their own talent and their own strength that needs to be nurtured and developed...

Again, I'm so glad you don't work in schools - you wouldn't last a day...

:)

by bobo1 on 02/09/2010 11:35:24 PM EST

[ Parent ]
I started my career in the schools, Bob. (none / 0)
I studied education and teaching.  My company (I was 1/3 owner) was a partner with a major university in the research, design, and development learning tools, and I worked with students and teachers in the classroom.  I helped children and adults learn to read, to calculate, to understand, and to think.

One of my tasks was to study and evaluate people like you, Bob, to identify your assets and deficits, strengths and weaknesses.  I was very good at it.

I still am.


The world is a strange place, but that makes it really fun to watch. -- bfaul

by EveningStarNM on 02/10/2010 02:47:32 AM EST

[ Parent ]
Banks and Bank-Like Organizations (none / 0)
One-hundred eighty-one banks, savings banks, and thrifts have failed since 2008 (see FDIC, WSJ).

Of the 149 banks that failed in 2008-2009, they had total assets of $473 billion.  If the bailout money that had been given to the those banks, they could have been saved, although the bankruptcy system -- if it still worked -- actually would be a more appropriate way to deal with them.  Instead, however, the thieves who are now running our economy decided that bankers should be able to pocket all of that money without actually helping our economy at all.

We actually do need a good banking system that helps finance the manufacturing and service sectors.  But somewhere along the way, people decided that shuffling money around with CDOs and CDSs was actually productive, even though it's not, and started dismantling the manufacturing and housing sectors in order to pay for otherwise worthless paper.  After all, who wants work where they actually have to get their hands dirty?

Bankers and other finance workers must now be classified with hairdressers and, especially, fast food workers: we have far too many of them, they don't produce anything of any substantial value to society, and we're likely to die from over-consuming their products.

With no hope in sight for reform for our banking and finance system, I have little hope that things will improve.  Congress is simply too corrupt, and the voters don't have the will to clean it up.


The world is a strange place, but that makes it really fun to watch. -- bfaul

by EveningStarNM on 02/09/2010 04:07:47 AM EST

insert broker for banker (none / 0)
The thing is that none of them needed to be bailed out. The Mark to Market rule changes allowed counter parties to say your paper is worthless, regardless of the underlying asset value. More or less, the change foreced liquidation at a manipulated market bottom caused by short sellers, rate hikes and accounting tricks.

Bank Assets - from raided banks were given to JP Morgan, Citi and BOA by the FDIC at penny's on the dollar.  Bank liabilities were taken on by the tax payer via the Fed, Treasury or GSE's (fred and fan).

Privitize Profit socialize debt........


by sisco66 on 02/09/2010 06:13:27 AM EST

[ Parent ]
A lot of their paper /was and is/ worthless. (none / 0)
They've created paper based on the value of paper based on the value of paper, and most of those derivatives, the CDOs and CDSs (which they still continue to create) have only the most tenuous connection to any real assets.

The original paper was useful for the economy in that it provided loans for productive uses, even if a portion of them were bad loans in that the lendees should never have been given such large loans or that the terms of the loans were usurious or deceptive.  A good banking system is supposed to provide good loans for productive purposes.

But our banking and finance system has been drastically changed: what used to be non-banking institutions act a lot like banks, and they have invented new means for shuffling money around that not only are not productive to the economy, but are outright harmful.  For instance, a financial institution that has an arm that functions like a bank can make loans, and the brokerage side of the institution can make bets that the loans will fail, thus making it in the institution's interest to issue very bad loans so that it can make a ton of money by selling them short.

I take your point: all of those teaming numbers of excess brokers that our schools of higher education have produced had to create some means for cashing in, and without any regulations to limit how unscrupulous or unproductive they could be, deceptive loans and worthless derivatives were the natural result.

A lot of those derivative "assets" that are now held by the larger institutions actually are worthless, and they have large liabilities attached to them.  We've temporarily staved off the consequences of the creation of those valueless "assets" by shoving so much money into the brokerage-banking industry that they've been able to shuffle numbers around enough to pad their balance sheets to show profits even when they've supposedly given back -- or never actually took -- the TARP money.  Every cent of the profits and bonuses which were distributed to the bankers and brokers should have been given to the taxpayers.

But there actually should not have been enough money left over to create such profits and bonuses because relatively little was done to take those actually worthless assets off the books.  A lot of institutions should have failed, been declared bankrupt, and their assets and liabilities re-valued and sold off.  But with the intervention of the government in lieu of a well-functioning bankruptcy system, we have allowed the brokerage-banks to reinflate the bubble with the creation of still more worthless paper.

No one seems to know it yet, but Goldman-Sachs and their brethren actually are bankrupt because they still hold mostly worthless paper.  It's just that they're allowed to say that the derivatives that they shuffle around actually have value.

It seems to me that nothing has really changed since before the collapse except that the taxpayers are deeper in debt and there is more worthless paper in the derivatives market sucking money out of markets that do have actual value than ever before.


The world is a strange place, but that makes it really fun to watch. -- bfaul

by EveningStarNM on 02/09/2010 09:41:58 AM EST

[ Parent ]
paper vs property (none / 0)
There is two sides to this coin. One side is the paper and bets traded between banks, brokers, AIG and the people who bought the CDO's. The other side is the actual commercial and residential real-estate. The triggers for the CDS payouts were tied to underlying asset values of both.

When the mark to market rules changed, it created a margin call thus a fire sale on the real estate market for commercial property owners and home builders, as well as the banks. The banks went from requiring 5 or 10% equity to requiring 20 or 30% regardless of your payment history. In other words, as short sellers were driving stock and equity assets into the ground the victims had to liquidate devaluing assets in a falling market to maintain capitalization or margins. 
This forced downward spiral wiped out all the operating margins and reserves for most companies as well as states. Don’t forget, that it was the very same short sellers and brokers that drove oil to $140 barrel putting the final nail in the coffin of the economy.
The whole thing has been manipulated to create artificial lows and highs. The same leverage that was used to drive the bubble was used to devalue it. It is long standing Goldman practice.  Due to naked short selling, the leverage on the way down was much greater than on the way up since you did not actually have to buy the stock or wait for an uptick. Hence the quick collapse. As the insiders changed the rules through Paulson, Cox and Bernanke they placed their bets accordingly.






by sisco66 on 02/09/2010 07:35:28 PM EST

[ Parent ]
I didn't know this: (none / 0)
"The banks went from requiring 5 or 10% equity to requiring 20 or 30% regardless of your payment history."

While I can understand that if the banks changed that requirement abruptly it could cause some inconveniences and cause some borrowers to drop out of the market, isn't that a good thing overall?


The world is a strange place, but that makes it really fun to watch. -- bfaul

by EveningStarNM on 02/09/2010 10:44:59 PM EST

[ Parent ]
Ya Great, for Goldman Sachs (none / 0)
You have to look at how all the pieces fit together. Not to be smart, but you do know what a margin call is, right?

When a 100,000 commercial property owners have to start dumping properties into the real estate market at the same time, while rates were high and values were already declining it creates a massive downward spiral on property values. Fire sales, and that is if you can actually sell the property.

At the same time this was going on, you had more or less the same process happening in stocks, corporate bonds and CDO's due to short selling, all triggering CDS payouts to the very people doing the short selling and creating the margin calls. Not to mention making money on the shorts. Oil as well. Behr, Merrill Lynch and Lehman were all neck deep in oil at $140 a barrel, even Buffet.

Not only did the developers and speculators get caught with their pants down in real-estate, they lost everything they had in the stock market as well. The fire sales happened so fast that people instantly started walking away from their home, particularly if they got trapped into having 2. Our builder sold the model with all the upgrades and fully furnished for 100k less than the base price of the house the year before, he needed the money.

So to answer your question. No it's not a good thing to force people to sell at the bottoma, unless your Goldman Sachs.

by sisco66 on 02/10/2010 10:36:49 PM EST

[ Parent ]
one more step (none / 0)
Many of the people who purchased with ARMs or sub-primes but could have probably afforded a 30 year fixed were unable to refinance without paying PMi insurnce once the rate expired or reset, due to the loss of equity. PMI on a 400k house is probably close to an extra $400 a month. That's a lot of cash when gas is $4 a gallon and all your credit card rates are 30%.

It was an across the board assult on the a American people, a true act of terrorism. And it was done and continues to be done to us by our government on behalf of  Goldman Sachs, JP Morgan, Citi and BOA.

Note: The bankruptcy rule changes only applied to people, not corps. It would have been very easy for the OTS (office of thrift supervision) to shut down AIG's thirft or bankrupt it without killing the insurance company, as Cenk suggested.

by sisco66 on 02/10/2010 10:50:31 PM EST

[ Parent ]
Wall Street Coup | 19 comments (19 topical, 0 hidden)
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