Let's Just Call It QE2 04-01-10 mpg See updates on the chances for a Great Depression shown below.... Timothy Geithner is a Sniveling Scamster Must Read - A quote...."What does it mean? It means that Obama's mortgage modification extravaganza has touched-off a gold rush in toxic paper. Subprime securitizations, which had been worth next to nothing, are now the hottest trade on Wall Street. It's a subprime bonanza! The investment sharpies are scarfing up all the crummy MBS they can get their hands on, because they know they can trade it in for Triple A FHA-backed loans when the program get's going. It's another swindle cooked up by Treasury Secretary Timothy Geithner to keep the brokerage clan in the clover. Here's how a Wall Street veteran explained it to me: - "It looks like the investors in securitizations will be swapping underwater real estate for govt-insured paper... I think the scam here is just to provide some cover so the hedge funds and other high net worth individuals can trade their low grade paper for Triple AAA mortgages insured by the FHA at the taxpayer expense." No Bang for the Keynesian Buck Must Read - A quote...." We are now facing a monumental debt crisis. We were warned. From the recession of 2001 until his death in August 2007, Dr. Kurt Richebächer warned in his monthly newsletter about an ominous development in the U.S. economy. The level of increased debt necessary to produce one additional dollar in GDP was rising. He said repeatedly that this would eventually produce a major financial crisis. The increased debt would require increased production to finance it, quarter by quarter, let alone repay it. If economic output per dollar of increased debt is declining, there will come a day when an increased dollar of debt will lead to negative returns. -- We are there. We reached that point in 2008. It continued through 2009. GDP fell, yet total debt increased. Here is a chart that describes this falling ratio, GDP to debt, 1965–2000." Regarding the articles shown above.... First it was TARP along with a plethora of other programs, than Fannie and Freddie and now it's Triple A FHA-backed loans, next it'll be the $2.5 trillion in Social Security surplus bonds (yes, yes, yes, they're supposedly non-negotiable and can't be used as collateral....we'll just see about that). There is absolutely no end in sight to this ongoing scam folks. NONE!! Every pot of money the Government can beg, borrow, steal or print, will be located, looted, swapped around, and leveraged to the point where it's simply no longer connected to any fiscal or monetary reality. The Fed has already created almost $24 trillion in back stops, guarantees and pay-outs to the Banksters. The FDIC is already in the hole and may start borrowing from their five hundred billion dollar credit line. And now this... Obviously the Fed in collusion with the Banksters and their non-stop bonus bonanza retirement program intends to stealthily (some would say illegally) pump-prime the markets while "extending and pretending" until the parasitic class is satisfied that the Fed's "asset protection program for wealthy individuals" (a.k.a. "the one percent") has been fully and throughly implemented. However, given the amount of securitization and derivative creation going on out there, it is simply no longer possible to predict "market" actions based on any sort of fundamental or technical analysis, or based on any models using past economic data. The US-NRE has entered into a whole new paradigm of financial product creation and market minipulation. Usually a very bad sign of things to come. As such the predictions forecast in Good Economic News - 12-04-09 - mpg will be modified as follows: Chance of a Depression era economic down-leg: [09/04/09 - 30%] [12/04/09 - 20%] - [04/01/10 - 10%] Chance of another a 70s to 80s stagflationary period: [09/04/09 - 70%] [12/04/09 - 80%] - [04/01/10 - 90%] Chance of inflation: Based on the early 70s to 80s ten year cycle one would normally predict a pick up in inflation only at the end of the decade, sometime in 2018-2020. However, NOTHING like this program of paper creation has ever been seen before, as such no attempts at predicting inflation will be made without further macro-economic visibility except to say inflation will appear a lot sooner, and will be a lot worse, than what occurred during the early 70s to 80s period. This rather vauge prediction is being made regardless of persistent U6 unemployment ranging between fifteen to twenty percent for at least the next several years, a declining housing market, flat to falling individual net incomes, flat to falling individual net worth, historically low capacity utilization rates, rising bankruptcies, rising forclosures and an imploding bond market which will eventually drive interest rates sky high. - mpg ========== ========== ========== ========== ========== ========== ========== ===== UPDATES: - As of May 12th 2010, chances for a Great Depression were revised upward to 30% from 10% The Second Leg of the Great Depression Was Caused by European Defaults Financial Warning - Chart - A quote...."Many Americans know that the Great Depression was started by the bursting of the giant Wall Street bubble of the 1920's (fueled by the use of bank deposits on speculative gambling, which is why Glass-Steagall was passed) , which in turn caused a run on American banks. -- But most Americans don't know that the second leg of the Depression was caused by European defaults." - At this point this website editor is forced to bump up the chances for a Great Depression Era "economic down leg" a full twenty percent. From 10% to 30% with a corresponding decrease in the chances of Stagflation from 90% to 70%. - mpg From the history file.... [09/04/09 - 30%] [12/04/09 - 20%] [04/01/10 - 10%] [05/12/10 - 30%] |