SnakeBoy
01-24-2009, 06:56 PM
Since everyone on the right seems to be giving props to Ron Paul for predicting the future I thought it would be only fair to give a crazy leftist his props.
Terror Prophets
Max Keiser
The Ecologist, Sept. 2004
Anger seems to be one commodity with no upside limit these days. The price of being upset is making new highs every day. The big question is: are high-profile outrage-causing events like the Enron and Worldcom accountancy scandals and 9/11 connected in some way? Connected in the same ways that all business these days is connected?
Just for a moment, consider this possibility: that the destabilizing of US stock and real-estate markets resulting from the Federal Reserve's overly relaxed approach to setting interest rates may be at the root of both the Enron-style scandals and the attacks on the World Trade Center. By not raising interest rates sooner, and more aggressively, Fed chairman Alan Greenspan (who many argue serves the interests of the crony class ahead of the interests of the grubby masses) kept the cost of finance artificially low. This encouraged a culture of widespread financial chicanery on Wall Street, which was simply too tempting for the world's extremists -- be they balance-sheet bad guys wanting to join in, or box-cutter-wielding terrorists looking for a target.
In other words, easy money has wider ramifications than just the obvious problems of inflation; there are real dangers attendant on not clamping down on speculation with higher interest rates, and those dangers are manifesting themselves in scary ways never dreamt of by the architects of the central banking system.
At the risk of sounding macabre, is it possible to make an educated guess as to where this easy-money risk might manifest itself again. In other words, if there are going to be more Enrons and Twin Towers, as US authorities and regulators suggest, can we predict, just by assessing money flows, where these might be?
The answers can be found by digging deeper into Greenspan's easy-money policies, keeping in mind the fact that it's cheap money that makes stocks and real-estate properties weak and vulnerable: the intrinsic value of such assets has been strip-mined by bankers and CEOs using derivatives and what US investment guru, Warren Buffett, describes as "weapons of mass financial destruction."
My guess is that the two stocks that look the likeliest to implode at the hands of derivative-wielding Wall Street financial types (and other fundamentalists) preying on a US economy made weak by cheap money are Fannie Mae and Freddie Mac. These two quasi-government backed mortgage dealers are not required to disclose fully all the details of their multi-trillion dollar lending practices. And, as with the Savings and Loan, Long Term Capital Management and Enron crises, earning for the two companies appear to be generated by trading worthless slips of paper back and forth between subsidiaries and booking these transactions as "profits."
According to Washington-based financial accounting advocacy group, FM Policy Focus, a default by Fannie and Freddie - who together underwrite 20 percent of US mortgages -- would cost each American taxpayer more than $16,000 to bail them out. Ouch!
In the US real-estate sector, the properties that look kind of vulnerable are in Las Vegas - at the heart of the country's over-consumption "culture." Deregulation, mergers and acquisitions and other "value-added" Wall Street "restructurings" have hollowed out any intrinsic value, and prepared the ground for another GDP-boosting catastrophe.
Am I being too cynical? It just seems to me that the US banks have become more like casinos, and US casinos have become more like banks. Both camps are engaged in loan sharking and money laundering in one form or another. And both are on the radar screens of fundamentalist arbitrageurs from Wall Street to Tora Bora. If only denial traded on the New York Stock Exchange: we'd all be rich.
Terror Prophets
Max Keiser
The Ecologist, Sept. 2004
Anger seems to be one commodity with no upside limit these days. The price of being upset is making new highs every day. The big question is: are high-profile outrage-causing events like the Enron and Worldcom accountancy scandals and 9/11 connected in some way? Connected in the same ways that all business these days is connected?
Just for a moment, consider this possibility: that the destabilizing of US stock and real-estate markets resulting from the Federal Reserve's overly relaxed approach to setting interest rates may be at the root of both the Enron-style scandals and the attacks on the World Trade Center. By not raising interest rates sooner, and more aggressively, Fed chairman Alan Greenspan (who many argue serves the interests of the crony class ahead of the interests of the grubby masses) kept the cost of finance artificially low. This encouraged a culture of widespread financial chicanery on Wall Street, which was simply too tempting for the world's extremists -- be they balance-sheet bad guys wanting to join in, or box-cutter-wielding terrorists looking for a target.
In other words, easy money has wider ramifications than just the obvious problems of inflation; there are real dangers attendant on not clamping down on speculation with higher interest rates, and those dangers are manifesting themselves in scary ways never dreamt of by the architects of the central banking system.
At the risk of sounding macabre, is it possible to make an educated guess as to where this easy-money risk might manifest itself again. In other words, if there are going to be more Enrons and Twin Towers, as US authorities and regulators suggest, can we predict, just by assessing money flows, where these might be?
The answers can be found by digging deeper into Greenspan's easy-money policies, keeping in mind the fact that it's cheap money that makes stocks and real-estate properties weak and vulnerable: the intrinsic value of such assets has been strip-mined by bankers and CEOs using derivatives and what US investment guru, Warren Buffett, describes as "weapons of mass financial destruction."
My guess is that the two stocks that look the likeliest to implode at the hands of derivative-wielding Wall Street financial types (and other fundamentalists) preying on a US economy made weak by cheap money are Fannie Mae and Freddie Mac. These two quasi-government backed mortgage dealers are not required to disclose fully all the details of their multi-trillion dollar lending practices. And, as with the Savings and Loan, Long Term Capital Management and Enron crises, earning for the two companies appear to be generated by trading worthless slips of paper back and forth between subsidiaries and booking these transactions as "profits."
According to Washington-based financial accounting advocacy group, FM Policy Focus, a default by Fannie and Freddie - who together underwrite 20 percent of US mortgages -- would cost each American taxpayer more than $16,000 to bail them out. Ouch!
In the US real-estate sector, the properties that look kind of vulnerable are in Las Vegas - at the heart of the country's over-consumption "culture." Deregulation, mergers and acquisitions and other "value-added" Wall Street "restructurings" have hollowed out any intrinsic value, and prepared the ground for another GDP-boosting catastrophe.
Am I being too cynical? It just seems to me that the US banks have become more like casinos, and US casinos have become more like banks. Both camps are engaged in loan sharking and money laundering in one form or another. And both are on the radar screens of fundamentalist arbitrageurs from Wall Street to Tora Bora. If only denial traded on the New York Stock Exchange: we'd all be rich.