The role of central banks: Bail Outs via debasing

[Hein-Verbruggen]

Myths exploded:
http://www.mises.org/story/1627

1) Cental bankers are independent of each other. FALSE, they act in concert
2) Central bank never intervene in matters of private equity. FALSE Long Term Capital, the and the law of big numbers disproved this
3) Prudent Man doctrine influences central bankers FALSE, they react to market meltdowns as any caged rat would to a flame
4) Central bankers will NOT interfere with bankcruptcies resulting from failed judgment. FALSE, case by case basis exceptions, LTC was bailed out,

Modern central banking policy: Bailout economics, steroids for sick rich patients.

1) 1987 stock market crash fallowed by the Alan Greenspan legacy action
October 19, 1987 Policy statement: "The federal reserve, consistent with its responsibilities as the nation's central banker, affirmed today its readiness to serve as a source of liquidity to support the economic and financial system."
2) LTCM hedge fund was bailed out in October 1998
3) Wall Street equity melt down in 2000
4) Fixed market commercial credit crisis (present bailing underway)
5) CDOs, SIVs, off-shore hedge funds, Big Bank loans to sick hedge funds (underway with open market purchases of junk notes by both ECB and US fed)

'It was merely a question of how you would do it, not if' Big Al.

We're off the Gold standard for a reason. So that central bankers can override currency and debase consumers, in order to subsidize fraud and hedge fund errors of judgment and out-and-out off-shore crimes.

The legacy for all central bankers is to act to debase currency as needed. To be the lender of last resort. Wall Street will NO LONGER trade in CDOs, therefore, central banks must buy them and hold them until maturity/or default. ($5 TRILLION US might get that done, maybe)

Today, junk paper bailouts are needed bigtime, along with rate cuts.

























































http://www.cyclingforums.com/t467644.html

 

[Wurm]

Corruption, deregulation, and manipulation. It's all good!





NOT.

 

[Crankyfeet]

Today, junk paper bailouts are needed bigtime, along with rate cuts.

So your summation is this statement. I thought your whole post was saying the opposite.

 

[Crankyfeet]

Oh yeah. And all the world's big money insiders know about the dark times ahead, including the strapped out hedge fund managers. That's why they're all madly BUYING US stocks and treasuries at the moment. They're getting ready for the hard times ahead.

So the world's banks are conspiring to deny you the financial crisis you so desire. What Bustards.

How's your property doing in San Francisco? The high end sales are going up and up in my neck of the woods. Then again we don't have people who gave up their day jobs to become "Real Estate Investors/Flippers" overnight.

banned poster posting under another alias

 

[Wurm]

"Good times coming" my ass.

...But interest rate cuts do not address the underlying problems of insolvency among homeowners, mortgage lenders, hedge funds and (potentially) banks. As market-analyst John R. Ing said, “A cut in rates will not solve the problem. This crisis was caused by excess liquidity and a deterioration of credit standards….A cut in the Fed Fund rate is simply heroin for credit junkies.”

The cuts merely add more cheap credit to a market that that is already over-inflated from the ocean of liquidity produced by former-Fed chief Alan Greenspan. The housing bubble and the credit bubble are largely the result of Greenspan’s misguided monetary policies. (For which he now blames Bush!) The Fed’s job is to ensure price stability and the smooth operation of the markets, not to reflate equity bubbles and reward over-exposed market participants. It’s better to let cash-strapped borrowers default than slash interest rates and trigger a global run on the dollar.

Financial analyst Richard Bove says that lower interest rates will do nothing to bring money back into the markets. Instead, lower interest rates will send the dollar into a tailspin and wreak havoc on the job market.
“There is no liquidity problem, but a serious crisis of confidence,"

Bove said:

"In a financial system where there is ample liquidity and a desire for higher rates to compensate for risk, the solution is not to create more liquidity and lower the rates that are available to compensate for risk. ... (The Fed) cannot reduce fear by stimulating inflation…

"It is illogical to assume that holders of cash will have a strong desire to lend money at low rates in a currency that is declining in value when they can take these same funds and lend them at high rates in a currency that is gaining in value. By lowering interest rates the Federal Reserve will not stimulate economic growth or create jobs. It will crash the currency, stimulate inflation, and weaken the economy and the job markets".

Bove is right. The people and businesses that cannot repay their debts should be allowed to fail. Further weakening the dollar only adds to our collective risk by feeding inflation and increasing the likelihood of capital flight from American markets. If that happens; we’re toast.

Consider this: In 2000, when Bush took office, gold was $273 per ounce, oil was $22 per barrel and the euro was worth $.87 per dollar. Currently, gold is over $700 per ounce, oil is over $80 per barrel, and the euro is nearly $1.40 per dollar. If Bernanke cuts rates, we’re likely to see oil at $125 per barrel by next spring.

Inflation is soaring. The government statistics are thoroughly bogus. Gold, oil and the euro don’t lie. According to economist Martin Feldstein, “The falling dollar and rising food prices caused market-based consumer prices to rise by 4.6 per cent in the most recent quarter.” (WSJ)

That’s 18.4 per cent a year, and yet Bernanke is still considering cutting interest rates and further fueling inflation.

What about the American worker whose wages have stagnated for the last six years? Inflation is the same as a pay-cut for him. And how about the pensioner on a fixed income? Same thing. Inflation is just a hidden tax progressively eroding his standard of living.

Bernanke’s rate cut may be boon to the “cheap credit” addicts on Wall Street, but it’s the death-knell for the average worker who is already struggling just to make ends meet.

...

http://globalresearch.ca/index.php?context=va&aid=6816

Meanwhile, the Kool-Aid Drinkers will keep on as if nothing's amiss.

 

[Crankyfeet]

The market of millions speaks louder than one doomsdayer who is so inept at predicting the market that he has to get a day job as an economic commentarist.

Doomsdayers are a dime a dozen. They've been around since Adam and always manage to attract a fearful ignorant crowd. Just reading a small portion tags it so.

Watch the market closely. It is telling you how the smart money is voting on this issue.....

Sometimes you wonder how others don't see it. It's not a given obviously. It just sways the odds. Hearing all this SELL...SELL...SELL stuff is so reassuring when you are trying to assess the domino risk in this crisis.

"Good times coming" my ass.



http://globalresearch.ca/index.php?context=va&aid=6816

Meanwhile, the Kool-Aid Drinkers will keep on as if nothing's amiss.

 

[Wurm]

Watch the market closely. It is telling you how the smart money is voting on this issue.....

Yes, the "smart money" has voted so well lately.

The "doomsdayer's" - many of them - have been predicting the current results for quite some time now, and have proven to be correct.

 

[thoughtforfood]

Yes, the "smart money" has voted so well lately.

The "doomsdayer's" - many of them - have been predicting the current results for quite some time now, and have proven to be correct.

There is a difference between an economic slowdown and an economic meltdown, and the "doomsdayers" see a world in which Mel Gibson will have a souped up Interceptor to police the mutant hoards. On the other hand, there are many who see this as the inevitable outcome of lose credit, but far from being a colapse. Just as with the dot.com boom/bust, there is a correction going on, but as a whole, the economies of the world are still on the rise, and are still well above being controlled by any one given entity be it the Fed, World Bank, or the local Hooters. Unrealistic panic is the real problem here, and "doomsdayers" are only delaying the positive growth that is and will continue to happen in many markets. Stop buying into the Road Warrior scenario, it is not real. The land and homes associated with this market are not going anywhere, and eventually people will develop safer ways to get back in because there is money to be made.

 

[Wurm]

As ugly as it often is, I prefer to observe reality...not delude myself with false optimism and cheery minimization.

YMMV.

 

[thoughtforfood]

As ugly as it often is, I prefer to observe reality...not delude myself with false optimism and cheery minimization.

YMMV.

The reality is the there was an over correction in the housing/mortgage derivatives market because of opinions such as yours. However, getting people to understand that is very difficult. People prefer pessimism because the fall is much shorter if they take one.

 

[Crankyfeet]

Ahh.....so.....

Wurm = Polyheme.boost = Hemopure = Hein-Verbruggen = Holocaust = Doctor.House = flyer.

Now the penny drops, and all those little mutual back-patting conversations make sense. Now you've opened yourself up a bit because Mr. Wurm has talked a lot more than the other preudonyms you use to spam the threads.

Mmmmm........

Haven't you had fun now on your little alter-ego charade

 

[Crankyfeet]

Speaking of pessimism......

Crank, meth, arrives on cue!

Asia equity bubble will pop too.

More interest rate cuts to come over the next 12 months. You were schooled here.

It pains me to think how much you are suffering in San Francisco. And how much you want the rest of the world to share in your misery.

Keep watching HKEX&Clearing in Asia (stock code # 388 on the HK market). Bought 2001 for HK$7.80. Still holding it at HK$235. It is up from $150 a little over a week ago. Keep watching this space. I'll fill you in on other treasures you may have missed while you went searching for negative karma in the world.

Should I get out of it now . I mean you did warn us some time ago and especially two weeks ago. Luckily I had the sense to stay focussed on fact and not deluded prognostication.

 

[jhuskey]

Ahh.....so.....

Wurm = Polyheme.boost = Hemopure = Hein-Verbruggen = Holocaust = Doctor.House = flyer.

Now the penny drops, and all those little mutual back-patting conversations make sense. Now you've opened yourself up a bit because Mr. Wurm has talked a lot more than the other preudonyms you use to spam the threads.

Mmmmm........

Haven't you had fun now on your little alter-ego charade

Wurm, I don't think so. Wrong person and wrong coast but I won't discount your other theories.

 

[thoughtforfood]

To: Clueless Crankhead

Rents are at all time highs in San Francisco--as are real estate prices in general in that city (and Peninsula area).

Better focus on the other 99% of the credit-based marketplace for global trends. CDOs are a global hedge fund and banking problem.

Keep dreaming.

I was so happy to have your inane, psychotic ravings gone. Has anyone ever suggested that you seek help immediately. I don't really care what kind of help either. Writing, psychiatric, substance abuse, economic, someone, anyone, please help him.

 

[thoughtforfood]

The global credit crisis is historic. Europe and Asia cannot escape a recession.

Uh, everything is "historic" you inept turd juggler.

 

[Felt_Rider]

Uh, everything is "historic" you inept turd juggler.

I thought cat juggling was bad, but a turd juggler? Man that stinks!!!

 

[Crankyfeet]

Wurm, I don't think so. Wrong person and wrong coast but I won't discount your other theories.

Unless you know that is Wurm's address. Every other pseudonym this basement dweller has used has had different, imaginary locations.

 

[Crankyfeet]

To: Clueless Crankhead

Rents are at all time highs in San Francisco--as are real estate prices in general in that city (and Peninsula area).

Better focus on the other 99% of the credit-based marketplace for global trends. CDOs are a global hedge fund and banking problem.

Keep dreaming.

So you've just contradicted your thesis a-g-a-i-n. Do you think that San Franciscans aren't listening to the news. Or is this just a regional problem, this credit crunch thing. Yes Europe and Asia are headed for misery, but San Franciscans are well protected from the effects of this historic Global Recession.

The more you keep coming back here the more embarassing its going to be. So when did you say for us to short the financial markets again?? Was it June 2005, when the S&P500 was 1200, or a couple of weeks ago when it was 1460?? And told us to short oil as well. Hmmm? S&P currently 1525 and on the rise. Oil $80.30 and rising.

Warren Buffett announces today an interest in a stake in Bear Stearns. Ahhh. Comforting to be thinking alike the real sage with results.

 

[Crankyfeet]

Yes, the "smart money" has voted so well lately.

The "doomsdayer's" - many of them - have been predicting the current results for quite some time now, and have proven to be correct.

I hope you wouldn't be so naive as to think that the 85% or so of money managers who can't even beat the market indices (ie the average returns) represent "smart money". No the smart money is the minority of people who make the excess returns that the 85% under-achieve. So the fact that so many money-managers were caught with their pants down, suggests that they are not so smart.

Remember, the market is the sum (in $$$ terms not in equal numbers of people) of the winnings and losses. And I am confident that people who have acquired significant wealth in their life are long financial assets at this moment as evidenced by Mr. Buffetts activity, and your ego-fluffed pronouncements.

Your bleating about the negative outlook neatly tags you as someone who has not been able to accumulate any wealth. The quiet achievers would never try to crystal ball with black and white assurety, like you pretentious gurus in a cycling forum are doing. They would be happy to feel 60-40 on the direction of the market. and be humble enough to keep their opinions to themselves. Notwithstanding that most of these wealth achievers probably, like Buffett, don't take any notice of market fluctuations.

In contrast to your spouting, I'm just trying to point out what's happening in the present - as it continues to resist your desires for compliance with your seemingly erroneous, as evidenced day by day, world view.

Anyone with any capital would never bleat in a public forum like you have because they are aware of the risks that even if they were right in the short-term, there opinions will adjust day to day based on continuous streams of new information.

So I am particularly wary of the risks that "know-nothing" posers like yourselves IMO present to people in forums such as these. Irrespective of the fact that no one is probably listening in any case.

 

[Crankyfeet]

A clever poster!

So funny to read the tired rants from Jan Ule supporters, rate cut deniers, and Hedge Fund defenders.

School is always in session.

Talking with yourself again?? Isn't it funny how you two are always online at the same time. And that Mr. Wurm is the only user-name that you have ever congratulated.