I hope we shall crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country.
- Thomas Jefferson
History will take a fine tooth comb to the activities of our government and the largest financial firms in this crisis… will the period of 2007-2009 be remembered as time when the global, money center banks gained more dominance over our government and more completely controlled the Federal Reserve?
It’s becoming increasingly clear that the bailouts are to ensure the continued dominance of the largest financial firms at the expense of others… here is a post from Zero Hedge that illustrates the type of insider dealing that pervades the governments handling of our problems…
~~~~ “The most flagrant abuser of conflicts of interest in the current economy, PIMCO, has just gotten its tentacles even more entangled with the rotor of the government’s economic shredder. Reuters reports Bill Gross has been hired to advise the U.S. government on the $118 billion of assets guaranteed in the Bank of America bailout. Pimco will be responsible for “evaluating Bank of America’s holdings, including securities backed by residential and commercial loans, to help determine the company’s losses.”
The world’s largest bond fund is opportunistically prepared for just these kinds of assignment, by recently raising a $3 billion distressed DISCRETIONARY fund for mortgage-backed security investing. This of course happened after PIMCO was selected for a comparable assignment, where it was picked to advise on $80 billion of credit union deposits. We fully expect Gross in his next monthly letter to announce the creation of a distressed fund investing/shorting Bank of America securities. But, of course, everything in Newport Beach is walled off from everything else. Last time we checked El-Erian was personally putting up chinese walls within the Sharkeez booths in Newport Beach.” ~~~~
Continuing to place these institutions at the center of all solutions will not create a stable, open financial system… note to the Obama administration… you’ve been spooked and railroaded…. your actions to date are a continuation of crony capitalism of the Bush administration… strike for the open waters…
Loosen the grip of the parties that have brought us to this place… there are many Americans who can help develop solutions… the answer is not propping up the bankrupt banks… the only purpose that serves is to cede control to the Federal Reserve… the Fed needs these firms to effectuate their policies… the Fed needs the large money center banks to add and subtract liquidity to the system… but taxpayers don’t need any of that… strike for open waters…
The financial collapse is a necessary cleansing of the pollution in our system… institutions that created toxic assets are most heavily laden with their weight… it is especially these firms which should fail and be swept away… these firms have balance sheets full of these assets… but more importantly have infrastructure of people, technology and counterparty relationships that are honed to manufacture, trade and/or invest in toxic type assets… Merrill Lynch for example… created more CDOs than any other firm… those parts of Merrill that support toxic asset development should be swept away (especially now that they are merged with the firm with the largest retail deposits)
And the latest plan to roll off the toxic assets to “private investors” who will be loaned funds by the Federal Reserve sounds like another giveaway to the the firms that created this crisis… if this is done it must have higher levels of transparency than previous programs… you cannot transfer trillions from taxpayers to private interests and hope that complexity will mask the truth… the truth will come out…
Firms have been failing since the founding of our nation… let them fail… backstop the deposits… wipe out equity holders… haircut the debt… contract this part of our economy… strike for open waters… set our people free…
* * * * I hope we shall crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country. * * * *
Post a Comment