"In other words, there was no economic data yesterday morning that pointed to either a rapid rise or slowdown in the economy. How is it then that all this other action hit the fan simultaneously? I believe it happened because a Treasury Secretary and a Fed chief and their friends at “Gold”man wanted it that way. It was just a few days earlier that the “Gold”man opined strongly that China was closing shop, yada yada. Then ex-“Gold”ie Eddie Lampert (former head of Goldman Sachs' risk-arbitrage desk and operator of a hedge fund that is financed by Goldman Sachs who likes to pay himself some $500 mil to a bil a year) reports to have put on a humungous position in Citigroup days after the word hits the Street that Citi just might be broken up into small pieces that Private Equity could swallow. Interesting. Citi is one of the heaviest weights in the Dow. The timing of all this is just too co-incidental for my tastes.
To put it bluntly (as usual), I think there has been an intervention here. Maybe we should be counting the times Fast Eddie and Fast George sit down to break bread? You have to know ex-Goldie Chair and present Treasury Sec Hank Paulson is going to be there. Maybe ex-Goldie Chair, recent ex-Treasury Sec and current Chair of Citigroup Exec Committee, Bob Rubin could join them.
I mean, these guys seem to be patterning themselves after the Chinese Communist Party Exec Committee. Is this really what Americans expect of their leadership?
Now you see ex-Treasury Sec John Snow as the new head of Cerberus Capital Management, one of America’s monster Private Equity firms that borrows mightily from HB&B sitting down to feast on a meal of Chrysler, for which he paid $7.4 billion for an 80 pct interest. Well Cerberus couldn’t write the check itself; that was HB&B, which just happens to be (drum roll) Citigroup, which as syndicate head also ponied up the $10 billion Cerberus needed to finance General Motors Acceptance Corp (GMAC). And of course, it was the govt’s Federal Deposit Insurance Corp (FDIC) that got into the middle of the act as regulator of Industrial Lending Companies (ILC) (drum roll… a bank), which GMAC would become. GM stock, hence, has been saved by the feds, Cerberus, Citi, and others in that ring. And what stock in the Dow 30 has been leading the charge in the past year, while financially totally insolvent if you rightly add in unfunded pension liabilities they would need the Administration/Fed (ie, the taxpayer) to pay off.
All this sucks. I have never seen such complicity between the Administration and HB&B and gnomes like Fast Eddie ever before. And man are these guys getting theirs.
Meanwhile the Average Joe is trying to make sense of it. Why even bother? Out of the room, out of the deal! These people don’t even keep Minutes. And if any of us requests docs under the so-called Freedom of Information Act, some lowly file clerk 1000 levels below these guys conveniently files our letters under “G”.
So, in a nutshell, I can blog on about how markets are supposed to work, but the plain vanilla truth is that at this time, in this America, free markets have been taken hostage, and moreover if you voice your opposition, one of the White House media friendlies like a Larry Kudlow is going to rip your heart out. (“How dare you speak out against “Goldie”locks!”)
I can hear it now."
billcara.com |
