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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (28948)	2/7/2012 12:03:34 PM
From: SGJ	Read Replies (1) \| Respond to of 223148

Lordy here we go

To: Sam who wrote (28948)	2/7/2012 10:43:41 PM
From: Hawkmoon	4 Recommendations Read Replies (3) \| Respond to of 223148

IMO, both parties are to blame for the housing bubble, as well as the "manufacturer financing" by the Chinese. And, of course, there is the over-leverage by the European banks which forced 5 of our banks to request the right to go 40-1 leverage in order to compete. Look.. Clinton's people reversed the Glass-Steagle Act, which permitted investment and commercial banks to play around in each other's turf. Then they created CDOs, MSBs, and greatly expanded the use of CDS to hedge against these increasingly toxic assets. One side wanted every minimum wage earner to be able to afford a jumbo home loan, while the other wanted to be able to originate the loans, then sell them off to greedy investors who no longer had the benefit of 30 year T-Bills to pay them a yield. Then top that off with China plowing their profits from their trade surplus into US Treasuries, thereby keeping interest rates artificially low, just so they could avoid spurring inflation in their own country from repatriation of those profits. Meanwhile, we turn Wall St. into a gambling house, with hundreds of trillions of dollars worth of opaque derivatives just waiting to blow up in our faces. We have naked CDS hedging against assets that the CDS holder doesn't bother to even own (buying insurance against your neighbor's home, hoping it burns down). And instead of "bailing" out main street (small business and unemployed workers) with jobs that yield a ROI to the overall economy (infrastructure, long term R&D projects.. etc) we keep paying them not to work so they will vote for a particular political party. Instead, we bail out the TBTF banks, so they can continue their gambling ways with non-OTC derivatives. Now, facing massive deflationary pressures, we're having taxpayers pick up the tab by increasing our national debt just so the TBTF banks have a place to park their cheap Fed Funds money, loaned to them by the Fed, while real growth in the physical economy languishes. These are few of the things that I see happening, although I apologize if they seem disarticulated and incomplete. But what I see is that that people need jobs so they can sustain themselves independently. And if the gov't has to finance those jobs, it should see an ROI in exchange for the money spent. That's the true role of gov't, to support it's citizens, not merely it's corporations, when the private sector screws up.. Hawk