From Super SIV to "Super Shiv"...
"They're LOOTING America in broad daylight...
right under your nose."
Remember when you were told that a group of America's
strongest banks were going to band together and form
a "Super SIV"?
Do you remember, when Paulson said this was the cure,
that markets would provide - market solutions...and
that the worst was now behind us?
Well the "the worst" wasn't behind us - now was it?
And markets didn't provide "market solutions" - did they?
And that "Super SIV" where banks would bail out banks,
never happened - did it?
Well guess what?
YOU my friend, are now providing the solution.
Taxpayers just like you, and me - are now bailing out the banks.
...that's their solution.
Taxpayers just like you and me - are now funding the new
"Super Shiv"... and yes, that's shiv - not SIV.
Shiv as in - a knife in the back of taxpayers.
Did you see James Lockhart on CNBC last week? Lockhart is
the director of the Office of Federal Housing Enterprise
Oversight, commonly known as OFHEO.
His job is to oversee the GSE's like Fannie Mae and Freddie
Mac. In his interview on CNBC, Lockhart admitted that the one
valid criticism that he would "not try to defend" - is that
Fannie and Freddie - "are now indeed - too big to ever be
allowed to fail."
How big is big - you ask?
How about $5 Trillion big. Yes, Trillion with a "T."
And how big is Five Trillion Dollars?
$5 Trillion is equal to the entire U.S. GDP - that's how big.
And guess what? Not only are you, and I, going to fund the new
"Super Shiv"...but, you and I are also going to absolutely
end up funding the ultimate bailout of the GSE's. Because
the GSE's are going to fund the bailout of the banks and
now the investment banks.
Fannie & Freddie's mortgage market share has now grown
a staggering +50% just since 2006. They now control 76%
of the U.S. Mortgage market.
Yes...76%.
I'd say that's too big to fail - how 'bout you?
And what have they just done with Fannie & Freddie?
They lowered their capital requirements, and eased
their lending standards.
Now given that they have the same underlying "credit crisis"
problems as Countrywide, and Bear Stearns... can you imagine
anyone offering up a solution that would allow Countrywide &
Bear Stearns to increase their market share by +50%, to lower
their capital base, and to widen and loosen their lending
standards?
Does that sound like recipe for a fix, or a recipe for disaster?
My friends, we have just witnessed a historic turning point.
And that turning point was not about the subprime mortgage
mess, it wasn't about the collapse of housing, not about the
credit crisis, and it wasn't about the Fed bailout out of the
investment banks.
It was the death of America's middle class as we now know it.
And that death was delivered by the greatest transfer of
wealth in all of history. A transfer that happened in just
8 short years. A transfer that occurred via unbridled greed,
leverage, and a lack of oversight.
Greedy Wall Street insiders did it, and money grubbing,
power hungry, and asleep at the wheel, politicans and
central bankers allowed it to happen - in broad daylight,
right under your and my nose.
Wall Street insiders used an unprecedented degree of leverage,
and financial engineering to suck billions and billions out of
the U.S. economy... sucking it dry to the point that it is
now collapsing from the weight of a pile of it's own worthless
derivative paper.
And what they've left you and I - is rampant inflation, a
hollowed out Dollar, deficits as far and high - as the eye
can see, a collapsing economy, and unfunded liabilities in
social security, medicare and the GSE's, for which you and I,
our children, and our children's - children - will spend
three generations paying for.
They have $25 million dollar apartments on 5th Ave,
vacation homes with helipads in the Hampton's, and Yachts
the size of ocean liners in Boca... and you and I,
- we have the bill.
And how big is that bill - you ask?
Well don't take my word for it... let's use former
U.S. Comptroller General David Walkers numbers.
Estimates range as high as $450,000 per U.S. household.
The GAO (the General Accounting Office) estimates that by
2040, current policy will require a 50 percent reduction
in federal spending, or a doubling of taxes to balance
the budget.
Given our history - do you think America will reduce
spending by 50%... or, raise taxes?
And just in case you were wondering? Do you think most of
those Wall St. fat cats who just sucked America dry -
care? ...given how capital gains & private equity firms
are taxed?
And how is our government going to fix all these
problems?
With more Debt!
Our government is now running up $5 of debt, for every
$1 of GDP growth that spending produces.
If a private business produced those results - they'd be
bankrupt very quickly. But, instead of going bankrupt -
our government just piles on more, and more debt onto the
backs of our children's - children.
And if you think Barack Obama, Hillary Clinton, or even
John McCain are going to solve that problem...
just wait for my next rant...
S.O.T.B.
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