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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (13707)	2/21/2013 1:06:03 PM
From: bruwin	3 Recommendations Read Replies (1) \| Respond to of 33421

Well said TO. Back a few years ago when quite a few of the large US banks, and later others, drew their countries into one of the major financial crises of the century, it was largely due to what has since become known as "toxic assets". Under normal circumstances with that c---p on their balance sheets they would have been eligible for bankruptcy due to Liabilities far exceeding Assets. To save them from that fate, under the 'heading' of "too large to fail", the country's bank, using the security of the country as "collateral", bought up that c---p and so reversed what would normally have been their inevitable demise. Now where I have a problem with what occurred is due to two possible scenarios ... 1) One assumes that Highly paid banking executives who run big banks should surely know enough about their business to identify what is a "toxic", or very bad asset risk and what isn't. If they did, or do, know, then the question is why did they go along with the original process in the first place? Did they do what they did out of ignorance and/or not knowing enough about what they were paid enormous salaries to know about? If that was the case then those in positions of responsibility should all have been given the boot, IMO. 2) One assumes that Highly paid banking executives who run big banks should surely know enough about their business to identify what is a "toxic", or very bad asset risk and what isn't. If they did, or do, know, then the question is why did they go along with the original process in the first place? Did they do what they did, knowing full well all about the nature of those bad assets, but connived, schemed, conspired to bundle up the c---p in as complicated a manner as possible in order to distribute it and so "rid themselves of the problem" by spreading it as far and as wide as possible. If that was the case then those in positions of responsibility should all have been stripped of their own personal assets, to compensate others for their fraudulent activities, ... and then sent to goal, IMO.

To: The Ox who wrote (13707)	2/21/2013 3:53:26 PM
From: Yorikke	7 Recommendations Read Replies (2) \| Respond to of 33421

Ox, I generally agree with what you write. A more correct assessment would simply be more cynical, and that I find a sad truth. I believe you give G more credit for understanding than he ever really had. He was a one trick pony, who stumbled his way out of the 87 crash by waving the liquidity wand and, like a drunken fairy, his vanity and prurient need for adulation never let him put it down. [Keynes never said there should be an end to the business cycle, that ‘goldilocks’ was the economic nirvana. He outlined a method of alleviating despair in periods of overly severe adjustment. (At least that’s how I read him.) The Keynesian Synthesis is corrupted monetarist double speak, something Keynes would have fought if he had not died so young, yet he is remembered for it and reviled for what he never really advocated.] The Fed has become an addict of its own ice nine, and the banking system nothing but dark of the night tweakers. The Fed may be in business for itself, but it is turning the country into the very place we fought a world war to crush. Once again cynicism does not change fact, though it makes it easier for the knowledgeable to grab their junk from the kid. But like Queequeg, even the most practiced harpooner understands it portends the carving of one’s own epitaph. And the even more cynical? What is the point when lasting through is for nothing more than the right to a place in the boat that drifts on an empty sea long after the drama has played itself out, unless Bokononism contains the final truth. ;)