Tuesday, December 16, 2008

There's No Pony

Today as we all know the Fed is doing its number, and is expected to lower that 'key rate target' to an alltime low of .5 percent. Hopefully by now we all realize that the actual rate mechanism has essentially been abandoned, and it is operating presently at .3%. To get anyone to take a chance on the present market, loan takers and lenders are having to decorate loans with enhancements. There is more than a problem with this though. What is going on in real time for our enjoyment and press attention is delusional. This song and dance is diversionary, and trying to keep the whole mess from falling about their ears while the very regulators - who persisted in avoiding using the laws to protect the public - get out of town.

What we and the world now know is that ratings of AAA were being given out to cover the basic 'trash' nature of investments. The trash was then being used as assets by those who bought. The little old lady's pension fund was holding worthless trash and depending on it. Yeh, that would be you and me if we were, say, retired teachers in some states that bought these AAA rated bonds.

Now we are waiting for the Federal Reserve to act in some way. The problem is, these regulators perpetrated the crime, and they want to leave it to the next administration to solve. Or to paraphrase Rep. Barney Frank, any administration, since this one seems either paralyzed or waiting for the getaway car.

European financial concerns are very concerned, because they are well aware that regulation needs to be imposed so that investors will return to U.S. Treasury bonds. As it stands, the Fed has allowed 'fails to deliver' to be the result of investment buys, in an increasing amount. What this basically means is that when a purchase is made, the bond is expected to arrive, but it hasn't been arriving. That is something like the old horsetrader trick, you advertise something for sale, take the money, and yes, 'fail to deliver'. In horsetrading, you had made the pony up. In international financial terms, the Fed is printing money, or making it up. In October, 20% of daily trading had become those fails.

"As yet, the U.S. Treasury has merely asked market participants to sort it out themselves." That is taken from the article I linked above, entitled 'U.S.Treasuries Reach Breaking Point'. It explains that the 'settlement system and lack of regulation led to this risk of market failure' - and concludes that the Federal Reserve should end its 'patience' and call in the financial institutions that are allowing this to make them stop it. I consider the author is being too kind. The perpetrators of this monumental theft have included members of the Fed.

We are in the clutches of criminals. As we discussed this a.m. at Eschaton, the consumer economy is depending on you to buy, while it is cheating you out of the fruits of your labor. You are not guaranteed the laws that protected you, rather we have an executive branch that has unanimously turned against the public and served the interests of business. The occupied White House has said it was protecting and defending the Constitution while in reality fighting against the Rule of Law that was the reason this country became the leading nation in the financial world. The American public was bewildered, and the world is joining us. There's no pony, folks.

The dog and pony show the Fed will put on today is the parade of the Emperor who has no clothes on. Anyone ready to throw their shoes?

When the history of the disgrace that has allowed criminals to control the executive branch is written, please let it be written that the left blogs didn't accept the lies, and fought them with truths.

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Blogger Quodlibet said...

There must be a pony.

5:40 AM  
Blogger Quodlibet said...

Because if there's no pony, that means this pile of horseshit is just a pile of horseshit.

5:54 AM  
Blogger Ruth said...

Yes, John, I realize that and it is scary.

6:19 AM  
Anonymous Anonymous said...

Of course, in zen terms, we have "samsara"...the illusion, in this case, of duality... the mistaken belief that the Fed and its member components are somehow "different" when http://en.wikipedia.org/wiki/Federal_Reserve_System#Federal_Reserve_Banks we see... a ha! They seem to be run by exactly the same people, and even technically are OWNED by the same people... ah... the duality was all an illusion after all... the regulator is the regulated... finally... it all comes together as one...financial Nirvana... for the thieving class!

And we, the public... are all so screwed.

9:24 AM  
Blogger Ruth said...

By the executive branch, a.k.a. the Revolving Door.

9:33 AM  

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