TARP now estimated to cost $356 billion

[TheBreeze]

[quote=Allan from Fallbrook]
Rough calculations put the potential cost of fixing this around $20Trn. The USG does not have anywhere near the resources to take that on, hence programs like PPIP that are looking to create monetary velocity and private partnerships and all with the recognition that this problem is too deep and wide to be handled organically. If Obama, Bernanke and the senior Treasury people were to come clean on how big this problem truly is, I think the wheels would come off the wagon in really short order.
[/quote]

Do you think there is anyone of relevance out there who doesn’t understand the scope of the problem? Jim Rogers has been on Bloomberg TV two dozen times saying that all the banks are insolvent. There are 15 thousand blogs out there that say the same thing. Just today, Zero Hedge came out with an article where Andy Beal predicts that 4,000 banks would be insolvent if they had to mark their book to market.

http://zerohedge.blogspot.com/2009/04/exposing-utter-hypocrisy-of-fdic-and.html

Do you think there is anyone out there with over $50K invested in the market who doesn’t know this stuff?

The government isn’t talking about what they are doing because it’s easier to loot that way. Madoff got away with running a Ponzi scheme for 25 years and now Geithner, Obama, and the financial oligarchy think they can do the same.

[TheBreeze]

[quote=davelj]

First… again – for the second or third time – previously I was discussing bank preferred TARP money. But you know this.
[/quote]

Everything I’ve read points me to the conclusion that the government does not even want to make money on TARP. The government paid 10x more than Buffett and the government is forgoing dividends for five years:

http://www.geldpress.com/2009/01/warren-buffett-and-hank-paulson-negotiator-and-thief/

Do you have some evidence that the government even wants to make money on TARP other than the BS that has come out of the mouths of Paulson and Geithner?

[quote=davelj]
Second… again… I realize that you’re a stereotypically short-sighted and impatient American – and thus part of The Problem – but it would be nice to wait until perhaps the latter innings of the game to start discussing how things are progressing.
[/quote]

It’s not so much that I’m impatient, it’s just that, unlike Mulder, I don’t believe. Most everything the George W. Obama administration has done is shady. They use AIG-FP to secretly bail out the banks. There’s no transparency. Hardly anyone that caused this debacle has lost their jobs (and many of them should probably be in prison). Summers is practically on the big banks’ payrolls. And it just goes on and on like that. Every day some macro-blog publishes an article about another shady thing either the Obama administration has done or the Bush administration did when they were in power.

WTF is an average guy like myself supposed to believe? Yes, you and Alan have superior knowledge of finance and accounting as compared to me. But, I and everyone else are certainly capable of understanding the broad concepts. Too many bad loans were made and the people who made them are getting rewarded for their stupidity and/or criminal behavior. How is rewarding crooks and idiots going to fix the problem?

[TheBreeze]

[quote=davelj]

First… again – for the second or third time – previously I was discussing bank preferred TARP money. But you know this.
[/quote]

Everything I’ve read points me to the conclusion that the government does not even want to make money on TARP. The government paid 10x more than Buffett and the government is forgoing dividends for five years:

http://www.geldpress.com/2009/01/warren-buffett-and-hank-paulson-negotiator-and-thief/

Do you have some evidence that the government even wants to make money on TARP other than the BS that has come out of the mouths of Paulson and Geithner?

[quote=davelj]
Second… again… I realize that you’re a stereotypically short-sighted and impatient American – and thus part of The Problem – but it would be nice to wait until perhaps the latter innings of the game to start discussing how things are progressing.
[/quote]

It’s not so much that I’m impatient, it’s just that, unlike Mulder, I don’t believe. Most everything the George W. Obama administration has done is shady. They use AIG-FP to secretly bail out the banks. There’s no transparency. Hardly anyone that caused this debacle has lost their jobs (and many of them should probably be in prison). Summers is practically on the big banks’ payrolls. And it just goes on and on like that. Every day some macro-blog publishes an article about another shady thing either the Obama administration has done or the Bush administration did when they were in power.

WTF is an average guy like myself supposed to believe? Yes, you and Alan have superior knowledge of finance and accounting as compared to me. But, I and everyone else are certainly capable of understanding the broad concepts. Too many bad loans were made and the people who made them are getting rewarded for their stupidity and/or criminal behavior. How is rewarding crooks and idiots going to fix the problem?

[TheBreeze]

[quote=davelj]

First… again – for the second or third time – previously I was discussing bank preferred TARP money. But you know this.
[/quote]

Everything I’ve read points me to the conclusion that the government does not even want to make money on TARP. The government paid 10x more than Buffett and the government is forgoing dividends for five years:

http://www.geldpress.com/2009/01/warren-buffett-and-hank-paulson-negotiator-and-thief/

Do you have some evidence that the government even wants to make money on TARP other than the BS that has come out of the mouths of Paulson and Geithner?

[quote=davelj]
Second… again… I realize that you’re a stereotypically short-sighted and impatient American – and thus part of The Problem – but it would be nice to wait until perhaps the latter innings of the game to start discussing how things are progressing.
[/quote]

It’s not so much that I’m impatient, it’s just that, unlike Mulder, I don’t believe. Most everything the George W. Obama administration has done is shady. They use AIG-FP to secretly bail out the banks. There’s no transparency. Hardly anyone that caused this debacle has lost their jobs (and many of them should probably be in prison). Summers is practically on the big banks’ payrolls. And it just goes on and on like that. Every day some macro-blog publishes an article about another shady thing either the Obama administration has done or the Bush administration did when they were in power.

WTF is an average guy like myself supposed to believe? Yes, you and Alan have superior knowledge of finance and accounting as compared to me. But, I and everyone else are certainly capable of understanding the broad concepts. Too many bad loans were made and the people who made them are getting rewarded for their stupidity and/or criminal behavior. How is rewarding crooks and idiots going to fix the problem?

[TheBreeze]

[quote=davelj]

First… again – for the second or third time – previously I was discussing bank preferred TARP money. But you know this.
[/quote]

Everything I’ve read points me to the conclusion that the government does not even want to make money on TARP. The government paid 10x more than Buffett and the government is forgoing dividends for five years:

http://www.geldpress.com/2009/01/warren-buffett-and-hank-paulson-negotiator-and-thief/

Do you have some evidence that the government even wants to make money on TARP other than the BS that has come out of the mouths of Paulson and Geithner?

[quote=davelj]
Second… again… I realize that you’re a stereotypically short-sighted and impatient American – and thus part of The Problem – but it would be nice to wait until perhaps the latter innings of the game to start discussing how things are progressing.
[/quote]

It’s not so much that I’m impatient, it’s just that, unlike Mulder, I don’t believe. Most everything the George W. Obama administration has done is shady. They use AIG-FP to secretly bail out the banks. There’s no transparency. Hardly anyone that caused this debacle has lost their jobs (and many of them should probably be in prison). Summers is practically on the big banks’ payrolls. And it just goes on and on like that. Every day some macro-blog publishes an article about another shady thing either the Obama administration has done or the Bush administration did when they were in power.

WTF is an average guy like myself supposed to believe? Yes, you and Alan have superior knowledge of finance and accounting as compared to me. But, I and everyone else are certainly capable of understanding the broad concepts. Too many bad loans were made and the people who made them are getting rewarded for their stupidity and/or criminal behavior. How is rewarding crooks and idiots going to fix the problem?

[TheBreeze]

[quote=davelj]

First… again – for the second or third time – previously I was discussing bank preferred TARP money. But you know this.
[/quote]

Everything I’ve read points me to the conclusion that the government does not even want to make money on TARP. The government paid 10x more than Buffett and the government is forgoing dividends for five years:

http://www.geldpress.com/2009/01/warren-buffett-and-hank-paulson-negotiator-and-thief/

Do you have some evidence that the government even wants to make money on TARP other than the BS that has come out of the mouths of Paulson and Geithner?

[quote=davelj]
Second… again… I realize that you’re a stereotypically short-sighted and impatient American – and thus part of The Problem – but it would be nice to wait until perhaps the latter innings of the game to start discussing how things are progressing.
[/quote]

It’s not so much that I’m impatient, it’s just that, unlike Mulder, I don’t believe. Most everything the George W. Obama administration has done is shady. They use AIG-FP to secretly bail out the banks. There’s no transparency. Hardly anyone that caused this debacle has lost their jobs (and many of them should probably be in prison). Summers is practically on the big banks’ payrolls. And it just goes on and on like that. Every day some macro-blog publishes an article about another shady thing either the Obama administration has done or the Bush administration did when they were in power.

WTF is an average guy like myself supposed to believe? Yes, you and Alan have superior knowledge of finance and accounting as compared to me. But, I and everyone else are certainly capable of understanding the broad concepts. Too many bad loans were made and the people who made them are getting rewarded for their stupidity and/or criminal behavior. How is rewarding crooks and idiots going to fix the problem?

[Allan from Fallbrook]

Breezhnev: Here’s my problem with your various posts: Using polemical language like “oligarchy” and “looting” doesn’t encourage anything in terms of a useful debate.

As to knowing the full scope of the problem: I don’t think anyone knows the complete picture and that is part of the problem. You and I have disagreed previously regarding the size of the derivatives market. I pointed out that the NOTIONAL (and that word is key) value is approx. $600Trn. Your response is that the number isn’t useful because the various contracts cancel each other out. That’s where I disagree. I don’t think that’s the case at all. I don’t think anyone has a clue as to how interrelated the various portfolios are, how much potential liability exists, or what would happen if things went south. Recall that in 1998 Long-Term Capital Management (LTCM) nearly blew a hole in the market when their various derivative positions unwound and LTCM was microscopic compared to the size of the present day derivatives market.

Here’s the key point regarding derivatives and, in a larger sense, the various “too big too fail” institutions: If there is a disorderly unwinding encompassing these institutions that occurs simultaneously or nearly simultaneously, then we are looking at a worldwide systemic collapse. That’s a Game Over scenario.

Now, back to words like “oligarchy” and “looting”. I don’t disagree that there are major issues regarding cronyism, favoritism, and outright fraud and theft. However, engaging in hysterical outbursts and saber rattling doesn’t do anything to solve the problem. It’s like yelling at the guy holding the matches while the damn house burns down. First, PUT OUT THE DAMN FIRE and then, once it’s out, worry about prosecuting the arsonist (or arsonists).

When I pointed out your various flip-flops regarding Obama, it was for the same reason. Pick a side, educate yourself and then get involved. I mention Dave’s background or mine for a reason and that is you have to understand what you’re talking about if you are seriously going to effect meaningful change. Screaming and waving your pitchfork doesn’t do a damn thing to fix the problems and, in many ways, it’s exactly what the evildoers (little nod to Dubya for ya) want. Hence, the distractions we see every day and those are meant to keep us away from the truth.

[Allan from Fallbrook]

Breezhnev: Here’s my problem with your various posts: Using polemical language like “oligarchy” and “looting” doesn’t encourage anything in terms of a useful debate.

As to knowing the full scope of the problem: I don’t think anyone knows the complete picture and that is part of the problem. You and I have disagreed previously regarding the size of the derivatives market. I pointed out that the NOTIONAL (and that word is key) value is approx. $600Trn. Your response is that the number isn’t useful because the various contracts cancel each other out. That’s where I disagree. I don’t think that’s the case at all. I don’t think anyone has a clue as to how interrelated the various portfolios are, how much potential liability exists, or what would happen if things went south. Recall that in 1998 Long-Term Capital Management (LTCM) nearly blew a hole in the market when their various derivative positions unwound and LTCM was microscopic compared to the size of the present day derivatives market.

Here’s the key point regarding derivatives and, in a larger sense, the various “too big too fail” institutions: If there is a disorderly unwinding encompassing these institutions that occurs simultaneously or nearly simultaneously, then we are looking at a worldwide systemic collapse. That’s a Game Over scenario.

Now, back to words like “oligarchy” and “looting”. I don’t disagree that there are major issues regarding cronyism, favoritism, and outright fraud and theft. However, engaging in hysterical outbursts and saber rattling doesn’t do anything to solve the problem. It’s like yelling at the guy holding the matches while the damn house burns down. First, PUT OUT THE DAMN FIRE and then, once it’s out, worry about prosecuting the arsonist (or arsonists).

When I pointed out your various flip-flops regarding Obama, it was for the same reason. Pick a side, educate yourself and then get involved. I mention Dave’s background or mine for a reason and that is you have to understand what you’re talking about if you are seriously going to effect meaningful change. Screaming and waving your pitchfork doesn’t do a damn thing to fix the problems and, in many ways, it’s exactly what the evildoers (little nod to Dubya for ya) want. Hence, the distractions we see every day and those are meant to keep us away from the truth.

[Allan from Fallbrook]

Breezhnev: Here’s my problem with your various posts: Using polemical language like “oligarchy” and “looting” doesn’t encourage anything in terms of a useful debate.

As to knowing the full scope of the problem: I don’t think anyone knows the complete picture and that is part of the problem. You and I have disagreed previously regarding the size of the derivatives market. I pointed out that the NOTIONAL (and that word is key) value is approx. $600Trn. Your response is that the number isn’t useful because the various contracts cancel each other out. That’s where I disagree. I don’t think that’s the case at all. I don’t think anyone has a clue as to how interrelated the various portfolios are, how much potential liability exists, or what would happen if things went south. Recall that in 1998 Long-Term Capital Management (LTCM) nearly blew a hole in the market when their various derivative positions unwound and LTCM was microscopic compared to the size of the present day derivatives market.

Here’s the key point regarding derivatives and, in a larger sense, the various “too big too fail” institutions: If there is a disorderly unwinding encompassing these institutions that occurs simultaneously or nearly simultaneously, then we are looking at a worldwide systemic collapse. That’s a Game Over scenario.

Now, back to words like “oligarchy” and “looting”. I don’t disagree that there are major issues regarding cronyism, favoritism, and outright fraud and theft. However, engaging in hysterical outbursts and saber rattling doesn’t do anything to solve the problem. It’s like yelling at the guy holding the matches while the damn house burns down. First, PUT OUT THE DAMN FIRE and then, once it’s out, worry about prosecuting the arsonist (or arsonists).

When I pointed out your various flip-flops regarding Obama, it was for the same reason. Pick a side, educate yourself and then get involved. I mention Dave’s background or mine for a reason and that is you have to understand what you’re talking about if you are seriously going to effect meaningful change. Screaming and waving your pitchfork doesn’t do a damn thing to fix the problems and, in many ways, it’s exactly what the evildoers (little nod to Dubya for ya) want. Hence, the distractions we see every day and those are meant to keep us away from the truth.

[Allan from Fallbrook]

Breezhnev: Here’s my problem with your various posts: Using polemical language like “oligarchy” and “looting” doesn’t encourage anything in terms of a useful debate.

As to knowing the full scope of the problem: I don’t think anyone knows the complete picture and that is part of the problem. You and I have disagreed previously regarding the size of the derivatives market. I pointed out that the NOTIONAL (and that word is key) value is approx. $600Trn. Your response is that the number isn’t useful because the various contracts cancel each other out. That’s where I disagree. I don’t think that’s the case at all. I don’t think anyone has a clue as to how interrelated the various portfolios are, how much potential liability exists, or what would happen if things went south. Recall that in 1998 Long-Term Capital Management (LTCM) nearly blew a hole in the market when their various derivative positions unwound and LTCM was microscopic compared to the size of the present day derivatives market.

Here’s the key point regarding derivatives and, in a larger sense, the various “too big too fail” institutions: If there is a disorderly unwinding encompassing these institutions that occurs simultaneously or nearly simultaneously, then we are looking at a worldwide systemic collapse. That’s a Game Over scenario.

Now, back to words like “oligarchy” and “looting”. I don’t disagree that there are major issues regarding cronyism, favoritism, and outright fraud and theft. However, engaging in hysterical outbursts and saber rattling doesn’t do anything to solve the problem. It’s like yelling at the guy holding the matches while the damn house burns down. First, PUT OUT THE DAMN FIRE and then, once it’s out, worry about prosecuting the arsonist (or arsonists).

When I pointed out your various flip-flops regarding Obama, it was for the same reason. Pick a side, educate yourself and then get involved. I mention Dave’s background or mine for a reason and that is you have to understand what you’re talking about if you are seriously going to effect meaningful change. Screaming and waving your pitchfork doesn’t do a damn thing to fix the problems and, in many ways, it’s exactly what the evildoers (little nod to Dubya for ya) want. Hence, the distractions we see every day and those are meant to keep us away from the truth.

[Allan from Fallbrook]

Breezhnev: Here’s my problem with your various posts: Using polemical language like “oligarchy” and “looting” doesn’t encourage anything in terms of a useful debate.

As to knowing the full scope of the problem: I don’t think anyone knows the complete picture and that is part of the problem. You and I have disagreed previously regarding the size of the derivatives market. I pointed out that the NOTIONAL (and that word is key) value is approx. $600Trn. Your response is that the number isn’t useful because the various contracts cancel each other out. That’s where I disagree. I don’t think that’s the case at all. I don’t think anyone has a clue as to how interrelated the various portfolios are, how much potential liability exists, or what would happen if things went south. Recall that in 1998 Long-Term Capital Management (LTCM) nearly blew a hole in the market when their various derivative positions unwound and LTCM was microscopic compared to the size of the present day derivatives market.

Here’s the key point regarding derivatives and, in a larger sense, the various “too big too fail” institutions: If there is a disorderly unwinding encompassing these institutions that occurs simultaneously or nearly simultaneously, then we are looking at a worldwide systemic collapse. That’s a Game Over scenario.

Now, back to words like “oligarchy” and “looting”. I don’t disagree that there are major issues regarding cronyism, favoritism, and outright fraud and theft. However, engaging in hysterical outbursts and saber rattling doesn’t do anything to solve the problem. It’s like yelling at the guy holding the matches while the damn house burns down. First, PUT OUT THE DAMN FIRE and then, once it’s out, worry about prosecuting the arsonist (or arsonists).

When I pointed out your various flip-flops regarding Obama, it was for the same reason. Pick a side, educate yourself and then get involved. I mention Dave’s background or mine for a reason and that is you have to understand what you’re talking about if you are seriously going to effect meaningful change. Screaming and waving your pitchfork doesn’t do a damn thing to fix the problems and, in many ways, it’s exactly what the evildoers (little nod to Dubya for ya) want. Hence, the distractions we see every day and those are meant to keep us away from the truth.

[TheBreeze]

[quote=Allan from Fallbrook]Breezhnev: Here’s my problem with your various posts: Using polemical language like “oligarchy” and “looting” doesn’t encourage anything in terms of a useful debate.
[/quote]

Oligarchy isn’t my term. That comes from the former Chief Economist of the IMF. I image that he’s seen and dealt with many more financial oligarchies than you, so I’ll stick with his view of what constitutes a financial oligarchy, thanks.

And the term ‘looting’ is used by several bloggers who have a ton more credibility than you, me, or any other random Internet poster.

[quote=Allan from Fallbrook]
As to knowing the full scope of the problem: I don’t think anyone knows the complete picture and that is part of the problem. You and I have disagreed previously regarding the size of the derivatives market. I pointed out that the NOTIONAL (and that word is key) value is approx. $600Trn. Your response is that the number isn’t useful because the various contracts cancel each other out. That’s where I disagree. I don’t think that’s the case at all. I don’t think anyone has a clue as to how interrelated the various portfolios are, how much potential liability exists, or what would happen if things went south. Recall that in 1998 Long-Term Capital Management (LTCM) nearly blew a hole in the market when their various derivative positions unwound and LTCM was microscopic compared to the size of the present day derivatives market.
[/quote]

CDS are just contracts. The government should just void them all. If I started a company tomorrow and that company wrote a $10 trillion CDS on the happening of some event, and then my company went bankrupt the following day, the bankruptcy court would just nullify the CDS. My guess is the only reason this hasn’t been done is some members of the financial oligarchy (like Goldman) wound up on the right sides of these things. The many former Goldman employees in Obama’s administration don’t want to do anything to hurt their future employer.

[quote=Allan from Fallbrook]
Here’s the key point regarding derivatives and, in a larger sense, the various “too big too fail” institutions: If there is a disorderly unwinding encompassing these institutions that occurs simultaneously or nearly simultaneously, then we are looking at a worldwide systemic collapse. That’s a Game Over scenario.
[/quote]

Says you. There’s no way to know what would happen because the government has provided us with 0 transparency.

And I gots some news for you. That systemic risk didn’t just disappear. Instead, it got transferred to the government.

http://zerohedge.blogspot.com/2009/04/evening-thoughts-and-question-of-day.html

I’d prefer to see the banking system collapse as opposed to the government, but that’s just me.

[TheBreeze]

[quote=Allan from Fallbrook]Breezhnev: Here’s my problem with your various posts: Using polemical language like “oligarchy” and “looting” doesn’t encourage anything in terms of a useful debate.
[/quote]

Oligarchy isn’t my term. That comes from the former Chief Economist of the IMF. I image that he’s seen and dealt with many more financial oligarchies than you, so I’ll stick with his view of what constitutes a financial oligarchy, thanks.

And the term ‘looting’ is used by several bloggers who have a ton more credibility than you, me, or any other random Internet poster.

[quote=Allan from Fallbrook]
As to knowing the full scope of the problem: I don’t think anyone knows the complete picture and that is part of the problem. You and I have disagreed previously regarding the size of the derivatives market. I pointed out that the NOTIONAL (and that word is key) value is approx. $600Trn. Your response is that the number isn’t useful because the various contracts cancel each other out. That’s where I disagree. I don’t think that’s the case at all. I don’t think anyone has a clue as to how interrelated the various portfolios are, how much potential liability exists, or what would happen if things went south. Recall that in 1998 Long-Term Capital Management (LTCM) nearly blew a hole in the market when their various derivative positions unwound and LTCM was microscopic compared to the size of the present day derivatives market.
[/quote]

CDS are just contracts. The government should just void them all. If I started a company tomorrow and that company wrote a $10 trillion CDS on the happening of some event, and then my company went bankrupt the following day, the bankruptcy court would just nullify the CDS. My guess is the only reason this hasn’t been done is some members of the financial oligarchy (like Goldman) wound up on the right sides of these things. The many former Goldman employees in Obama’s administration don’t want to do anything to hurt their future employer.

[quote=Allan from Fallbrook]
Here’s the key point regarding derivatives and, in a larger sense, the various “too big too fail” institutions: If there is a disorderly unwinding encompassing these institutions that occurs simultaneously or nearly simultaneously, then we are looking at a worldwide systemic collapse. That’s a Game Over scenario.
[/quote]

Says you. There’s no way to know what would happen because the government has provided us with 0 transparency.

And I gots some news for you. That systemic risk didn’t just disappear. Instead, it got transferred to the government.

http://zerohedge.blogspot.com/2009/04/evening-thoughts-and-question-of-day.html

I’d prefer to see the banking system collapse as opposed to the government, but that’s just me.

[TheBreeze]

[quote=Allan from Fallbrook]Breezhnev: Here’s my problem with your various posts: Using polemical language like “oligarchy” and “looting” doesn’t encourage anything in terms of a useful debate.
[/quote]

Oligarchy isn’t my term. That comes from the former Chief Economist of the IMF. I image that he’s seen and dealt with many more financial oligarchies than you, so I’ll stick with his view of what constitutes a financial oligarchy, thanks.

And the term ‘looting’ is used by several bloggers who have a ton more credibility than you, me, or any other random Internet poster.

[quote=Allan from Fallbrook]
As to knowing the full scope of the problem: I don’t think anyone knows the complete picture and that is part of the problem. You and I have disagreed previously regarding the size of the derivatives market. I pointed out that the NOTIONAL (and that word is key) value is approx. $600Trn. Your response is that the number isn’t useful because the various contracts cancel each other out. That’s where I disagree. I don’t think that’s the case at all. I don’t think anyone has a clue as to how interrelated the various portfolios are, how much potential liability exists, or what would happen if things went south. Recall that in 1998 Long-Term Capital Management (LTCM) nearly blew a hole in the market when their various derivative positions unwound and LTCM was microscopic compared to the size of the present day derivatives market.
[/quote]

CDS are just contracts. The government should just void them all. If I started a company tomorrow and that company wrote a $10 trillion CDS on the happening of some event, and then my company went bankrupt the following day, the bankruptcy court would just nullify the CDS. My guess is the only reason this hasn’t been done is some members of the financial oligarchy (like Goldman) wound up on the right sides of these things. The many former Goldman employees in Obama’s administration don’t want to do anything to hurt their future employer.

[quote=Allan from Fallbrook]
Here’s the key point regarding derivatives and, in a larger sense, the various “too big too fail” institutions: If there is a disorderly unwinding encompassing these institutions that occurs simultaneously or nearly simultaneously, then we are looking at a worldwide systemic collapse. That’s a Game Over scenario.
[/quote]

Says you. There’s no way to know what would happen because the government has provided us with 0 transparency.

And I gots some news for you. That systemic risk didn’t just disappear. Instead, it got transferred to the government.

http://zerohedge.blogspot.com/2009/04/evening-thoughts-and-question-of-day.html

I’d prefer to see the banking system collapse as opposed to the government, but that’s just me.

[TheBreeze]

[quote=Allan from Fallbrook]Breezhnev: Here’s my problem with your various posts: Using polemical language like “oligarchy” and “looting” doesn’t encourage anything in terms of a useful debate.
[/quote]

Oligarchy isn’t my term. That comes from the former Chief Economist of the IMF. I image that he’s seen and dealt with many more financial oligarchies than you, so I’ll stick with his view of what constitutes a financial oligarchy, thanks.

And the term ‘looting’ is used by several bloggers who have a ton more credibility than you, me, or any other random Internet poster.

[quote=Allan from Fallbrook]
As to knowing the full scope of the problem: I don’t think anyone knows the complete picture and that is part of the problem. You and I have disagreed previously regarding the size of the derivatives market. I pointed out that the NOTIONAL (and that word is key) value is approx. $600Trn. Your response is that the number isn’t useful because the various contracts cancel each other out. That’s where I disagree. I don’t think that’s the case at all. I don’t think anyone has a clue as to how interrelated the various portfolios are, how much potential liability exists, or what would happen if things went south. Recall that in 1998 Long-Term Capital Management (LTCM) nearly blew a hole in the market when their various derivative positions unwound and LTCM was microscopic compared to the size of the present day derivatives market.
[/quote]

CDS are just contracts. The government should just void them all. If I started a company tomorrow and that company wrote a $10 trillion CDS on the happening of some event, and then my company went bankrupt the following day, the bankruptcy court would just nullify the CDS. My guess is the only reason this hasn’t been done is some members of the financial oligarchy (like Goldman) wound up on the right sides of these things. The many former Goldman employees in Obama’s administration don’t want to do anything to hurt their future employer.

[quote=Allan from Fallbrook]
Here’s the key point regarding derivatives and, in a larger sense, the various “too big too fail” institutions: If there is a disorderly unwinding encompassing these institutions that occurs simultaneously or nearly simultaneously, then we are looking at a worldwide systemic collapse. That’s a Game Over scenario.
[/quote]

Says you. There’s no way to know what would happen because the government has provided us with 0 transparency.

And I gots some news for you. That systemic risk didn’t just disappear. Instead, it got transferred to the government.

http://zerohedge.blogspot.com/2009/04/evening-thoughts-and-question-of-day.html

I’d prefer to see the banking system collapse as opposed to the government, but that’s just me.

[Author]

Posts