Thursday, November 27, 2008

SAR #8332

SAR 8332

Traditionally it has been profitable companies that get nationalized.

Can You Spell "Weimar"? The Fed is wildly stuffing cash into every crevice it sees in the dike, confident they can complete repairs before inflation runs away with the remnants of the American economy. That light in the distance isn't the end of the tunnel - it's at Ben's print shop.

Early Christmas: The Fed has wrapped up $7.4 trillion and put it under tree for Wall Street. A few stocking stuffers for a few near-banks, but half of everything made in the US last year has been either given or promised to the bankers and brokers. Almost all of this was done without public discussion or Congressional authority. It is simply the GOP rewarding the base as they run out the door. You can tell your grandkids you witnessed the greatest theft in history .

Spot Quiz: Is Britain going bankrupt? (a) Yes, (b) Yes, (c) All of the above.

A Bank's A Bank: Paulson's TARP has given Bernanke's Fed $20 billion to allow it to lend $200 billion to holders of asset-backed securities. Never mind the math, they are bankers. And never mind the loan, the Fed is a bank. A private one, lest you forget.

Tarot Cards: Goldman Sachs issued bonds guaranteed by the FDIC at 200 basis points over Treasuries. Why? Why is an FDIC-backed bond less trusted than a Treasury? Selective default by Uncle Sam?

Cockroaches: Some memes running around the web need to be squashed. Here's one: The average Union worker at GM makes $70 an hour. Nope. About $28. The US operations of Toyota, VW and Honda average $24-$25. Go beat another horse.

Who, What, Where, When, How Much and Why? There is no transparency and there is no oversight. Paulson and Bernanke refuse to say how much they are giving away, to whom, nor what (if anything) they are getting in return. Requiring disclosure would set off a panic if the bankruptcy of the banking system were no longer hidden. Ditto, the Treasury.

Deflation: Next year British households will pay back more money to banks and building societies than they take out in new mortgages.

Captain Renault: The GAO is shocked to find the Treasury has handled TARP poorly, with a systemic failure to track how the money was spent and few controls to prevent conflicts of interest between Paulson and Goldman Sachs .

Droll proverb: The Fed's latest $800 billion attempt to calm the waters has been called "spitting in the wind." Really, they said spitting.

Slight of Hand: The only part of the $7.4 trillion in giveaways and guarantees approved by lawmakers is the $700 billion TARP, not one penny of which has been spent on what was authorized. Last week the Fed lent out $91.5 billion - 2,000% more than the average week in the three years before this all started, when banks borrowed only $48 million a week. This isn't the New Deal, its the Raw Deal.

Reminder: No sales leads to no profits leads to no dividends. This, according to Bloomberg, is "news".

Pablum: A long article asks, "Will the Financial Crisis Put an End to Reckless, Planet-Destroying Consumption?" Their answer is 'Hopefully". The real answer is "No". Go read something else.

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