The Mother Of All Frauds

Zarathustra · 09-21-2008, 07:13 PM

http://market-ticker.denninger.net/

Saturday, September 20. 2008
Posted by Karl Denninger at 23:04

The Mother Of All Frauds

Well now we have it - since this is a proposed bill (public) and in the interests of fair use, here you have it as reported by Fox:

LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY

TO PURCHASE MORTGAGE-RELATED ASSETS

Section 1. Short Title.

This Act may be cited as ___________________.

Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase.—The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

(b) Necessary Actions.—The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:

(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;

(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;
(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and

(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.

Sec. 3. Considerations.

In exercising the authorities granted in this Act, the Secretary shall take into consideration means for—

(1) providing stability or preventing disruption to the financial markets or banking system; and

(2) protecting the taxpayer.

Sec. 4. Reports to Congress.

Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.

Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.

(a) Exercise of Rights.—The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.

(b) Management of Mortgage-Related Assets.—The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.

(c) Sale of Mortgage-Related Assets.—The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.

(d) Application of Sunset to Mortgage-Related Assets.—The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.

Sec. 6. Maximum Amount of Authorized Purchases.

The Secretarys authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time

Sec. 7. Funding.

For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Sec. 9. Termination of Authority.

The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.

Sec. 10. Increase in Statutory Limit on the Public Debt.

Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.

Sec. 11. Credit Reform.

The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.

Sec. 12. Definitions.

For purposes of this section, the following definitions shall apply:

(1) Mortgage-Related Assets.—The term mortgage-related assets means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.

(2) Secretary.—The term Secretary means the Secretary of the Treasury.

(3) United States.—The term United States means the States, territories, and possessions of the United States and the District of Columbia.

I'm speechless.

Let's disassemble this monster piece by piece.

First, this is a de-facto nationalization of the entire banking, insurance, and related financial system. Specifically:

"(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;"

That's right - every bank and other financial institution in the United States has just become a de-facto organ of the United States Government, if Hank Paulson thinks they should be, and he may order them to do virtually anything that he claims is in furtherance of this act.

This might include things like demanding that a bank or other financial institution sell him its paper, even if it forces that firm to collapse and be assumed by the FDIC!

You didn't buy any bank stocks last week did you?

"(a) Authority to Purchase.—The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States."

This, at first blush, would seem to indicate that only American firms would be covered. Nothing is further from the truth. If the Chinese wish to unload some of their purchased toxic sludge they merely sell it to, oh, Goldman Sachs for 40 cents on the dollar and then Goldman sells it to the Treasury for 50. This, under the black letter of the law here, is perfectly legal, which means that one must assume that Paulson will in fact foist off all the bad paper on world markets that was originally based on a mortgage in the United States, while allowing his banker buddies here to loot the taxpayer by acting as an intermediary in the transaction!

"(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;"

Contracts can (and presumably will) be "no bid, no solicitation" and given to whomever Secretary Paulson favors, without regard to the public interest or normal competitive bidding processes. Must be nice to be a "Friend of Hank."

"In exercising the authorities granted in this Act, the Secretary shall take into consideration means for—

(1) providing stability or preventing disruption to the financial markets or banking system; and

(2) protecting the taxpayer."

Notice which comes first.

"(c) Sale of Mortgage-Related Assets.—The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act."

Having bought these securities for any price Mr. Paulson would like (and he can compel institutions to sell at his demanded price as noted above!) he can then sell those assets at any price he wishes, to anyone he wishes. It certainly is nice to be a "Friend of Hank", and it most certainly sucks if you're not.

"The Secretarys authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time"

This is clever and nobody in the mainstream media has figured it out.

If you think the cost of this bill is $700 billion, you're wrong. The cost is actually infinite and the entire bill constitutes a giant money-laundering scheme.

Paulson can (and presumably will) buy up to $700 billion of these "assets", then sell them. Let's say he decides to buy them at 60 cents on the dollar and sell them for 10. You, the taxpayer, will eat the fifty cents, for an immediate cost of $350 billion dollars.

Having done so, he is then authorized to do so again, since the $700 billion is no longer on the government's balance sheet.

In fact, he can do this without limit, other than possibly due to the federal debt ceiling, which of course Congress will raise any time we get close to it. Oh yeah, this bill does that right up front too. No need to bother with it the first time around.

Folks, $700 billion isn't even close to the total cost of this monster.

If Paulson and his successor decide to, they could literally cycle all $5.3 trillion of Fannie and Freddie's debt through this scheme, potentially sticking the taxpayer for 20% or more of the total, plus as much private debt on various bank balance sheets as they can manage to nationalize until (and possibly beyond) the point where the bond market tells him to go to hell.

Bottom line: This bill gives Paulson the ability to nationalize an UNLIMITED amount of private debt and force YOU AND YOUR CHILDREN to pay for it.

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

If you are a bank, investor, or other entity who is forcibly gang-raped by Secretary Paulson due to his actions as "King" (crowned by Congress) under this law, you are unable to seek redress in the courts or by administrative action.

The claim is that this is intended to "promote confidence and stability" in the financial markets.

It will do no such thing.

It will instead strike terror into the hearts of investors worldwide who hold any sort of paper, whether it be preferred stock, common stock or debt, in any financial entity that happens to be domiciled in the United States, never mind the potential impact on Treasury yields and the United States sovereign credit rating.

I predict that if this passes it will precipitate the mother and father of all financial panics, although exactly when the "short bus" riders who inhabit the equity market will figure it out remains to be seen.

If they have an IQ larger than their shoe size it will commence at 9:30:01 AM Monday morning, although given history and the lack of intelligence displayed by the crooning media market euphoria may continue until the first couple of firms are dismantled by Paulson's newly-crowned Kingly powers with the scraps handed out to his favored few.

The best part of this outrageous fraud is that those who get bent over the table can't even sue - their only recourse will be the (literal) deployment of pitchforks and torches.

That Paulson and Bernanke circulated this document, irrespective of what actually gets reported out onto the floor of the House and Senate (if anything) tells you everything you need to know about his intentions and the safety of your financial assets in the United States markets.

That this "proposal" hasn't resulted in Congress calling for both Bernanke and Paulson to resign for their blatant attempt to crown Paulson King tells you everything you need to know about Congressional integrity as well.

My advice: Don't be caught with any stock or debt instruments linked to a United States financial firm in your portfolio past 9:30 AM Monday morning.

MyShadow · 09-22-2008, 01:07 AM

There appears to be another conundrum here for Main Street.

Let's say I have one of these crappy mortgages but not in default (I don't but just an example). My bank reviews risk and see's that the LTV is risky due to declining values. My bank decides to cut bait and put my mortgage into the "program". I didn't agree contractually that my mortgage could be "assigned" to the US Gov't and be auctioned off at 50% or whatever. The US Gov't wants to be admonished from litigation if this goes down - so it's between me and the bank.

Lets say I loose in this battle. Then I loose all of my equity, and I loose the property. I'm out on the street. The bank gets 50%, and then the US Gov't gets the property and sells it, maybe later, and gets back the 50% paid to the bank, and makes a profit - which goes back into the system , maybe to address national debt or such. This is all good for the bank and US Gov't - but Main Street is 'f-ed'.

WTF?

This is just more of the Elite scheme at play.

Oh - and here is another sick twist to this. Lets say my bank that holds the mortgage is one of those "failed" banks like IndyMac or such that is now owned by the US Gov't. They could now legally sit there and flip these houses for profit. There is alot of incentive for them to do that - it's a win win for them. But we get 'f-ed'.

WTF?

Z - This is more than the mother of all frauds. It's the mother f-ing fraud of all time.

Sorry - about my f-bombs!

MyShadow

Zarathustra · 09-22-2008, 01:41 AM

M,

That's what people don't understand, or there would be 50,000 rioting in the streets of N.Y. and Washington tomorrow morning. Not only is it the greatest financial fraud ever executed in the history of this country, perhaps the world, it is being done by those who have "sworn" to uphold the Constitution and protect and serve the people of the United States. As I have said elsewhere, the trials of Neuremburg would be to kind of a fate for these vile, criminal traitors.

Z

Rocky_Shorz · 09-22-2008, 02:01 AM

Quote:

United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.

so the 800B can go as high as 11.3T?

Quote:

Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase.—The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

Well banks are already taking up to a 65% hit on short sales with the current market, by allowing banks to dump this paper to free assets to offer more loans might not be as bad as you are thinking.

The banks are still getting slammed for their mistakes.

The part that could help the current homeowner is this might save many from foreclosure, it's the HELOCs that have nothing to back it right now, and many are almost as large as the original mortgage. the 2nd on a short sale gets a 10% kicker to make them go away, so the banks can toss it to the Fed to get it off their books, taking a 95% hit, but frees up other money they can borrow for other loans. All a homeowner needs to do right now is stop paying the second and keep the first current... This is going to help the collapse of many families falling into foreclosure...

The other thing to notice is this is going to the Treasury, not the Fed Reserve, remember what I was saying about backing a new currency with homes... This move is keeping America, owned by America.

I'm in no way an expert, but I don't see it as bad as the other options they had...

Zarathustra · 09-22-2008, 02:17 AM

Quote:

Originally Posted by Rocky_Shorz

so the 700B can go as high as 11.3T

I have experience in Short Sales lately and know that homes are selling for as little as 35% of what they sold for in 2005-6.

It isn't even the original loans that are in trouble, it is the Home Equity Lines of Credit that are causing the biggest problem.

Many of the original loans are being covered in the sale, but there are HLOCs on many homes as big as the original mortgage.

To Keep people from Foreclosure, with this new bill, they can just stop paying on the 2nd and let the Government pick it up...

The positive side is the Treasury is taking over all of these homes, not the Fed Reserve. What will happen is the market will stop sinking and will turn around much quicker.

I can see the possibility of these 2-3 million foreclosures turning into assets within 1.5-2 yeas.

If the market continued into the free fall it is experiencing, it would reach a point where foreigners could by homes here for several months income.

This step is going to help keep America, owned by America...

but 11.3T... wow...

I must respectfully disagree, Rocky.

First, there is no limit on how high the spending can go, the $700 billion can only carried at ONE TIME, so the Treasury Secretary will be free to fill up that $700 billion "bucket" as often as he wishes.

Second, the difference between the Treasury and the Fed holding the paper is irrelevant, since the Treasury will borrow the money from the Fed to be paid back by the American people, plus interest. The inflationary pressure of AT LEAST 1 trillion, most likely much more, on a defecit spending economy with a total GDP of around 14 trillion will be enourmous.

Third, bad paper is bad paper, switching ownership doesn't alter that fact, your timeline of 1 to 2 years would therefore be valid with a free market handling of the issue, and in my opinion more so.

Fourth, the market was falling because it NEEDED to, it was overvalued, and nothing can ever stop a worthless asset from being valued as exactly that.

Fifth, a huge percentage of our debt IS being carried by foreigners. The buying of our national assets by foreign nations has been in full swing for years now.

This is an open door to fascism, especially when combined with the Patriot Act and subsequent legislation. Thomas Jefferson would need to be hospitalized for uncontrolled vomiting if we to wake today. There is nothing positive for the American people here, unless you consider an even bigger economic crash, which always and inevitably results from these machinations to stop one, and the further devaluing of their currency, and the increase in the already unfathomable mountain of debt heaped upon their already overtaxed backs.

Z

Zarathustra · 09-22-2008, 02:32 AM

http://news.yahoo.com/s/ap/bank_change
Last major investment banks change status

Great, now they can rape and pillage another market, and recieve FED loans while doing it. This is madness happening right before our eyes!

Rocky_Shorz · 09-22-2008, 02:40 AM

Quote:

Originally Posted by Zarathustra

http://news.yahoo.com/s/ap/bank_change
Last major investment banks change status

Great, now they can rape and pillage another market, and recieve FED loans while doing it. This is madness happening right before our eyes!

Would you prefer Bank of America, a Rothschild company buy up both institutions once they are down to penny stock?

Zarathustra · 09-22-2008, 02:48 AM

Quote:

Originally Posted by Rocky_Shorz

Would you prefer Bank of America, a Rothschild company buy up both institutions once they are down to penny stock?

That is assuming that everyone involved is not tied to the Rotschild's.

What I would prefer is that fascism not be installed in this country. I can't remember who said it, someone will have to look it up, but one definition of fascism I have read is "profits are private and losses are social". What needs to happen is a clearing of the house on a scale that hasn't occurred on this continent since 1776. In lieu of that, companies that fail end. Companies that succeed live on. They reap the reward when things work out, and they lose when they don't. Of course there are economic ramifications for everyone if a large company goes bankrupt, but if there is anything viable, the market will fill that hole, if there isn't anything viable, then the company should've failed earlier.

What is going on now is madness, and worse the American people are being led to believe it is for their benefit. It is directly for the benefit of the Rothschild's, Rockefellers, etc.. etc... ad nauseum, and their vassals that call our "leaders". Nothing good can come from this.

Rocky_Shorz · 09-22-2008, 02:53 AM

Quote:

Originally Posted by Zarathustra

I

bad paper is bad paper, switching ownership doesn't alter that fact, your timeline of 1 to 2 years would therefore be valid with a free market handling of the issue, and in my opinion more so.Z

Well remember, each dollar a bank has, can turn into 9 x as much in loans, for a bank to hold a bad mortgage, they have to put money aside in reserve to cover it, which takes away 9 times as much in loan capability, that is why they are willing to dump short sales quick at a 65% loss.

If they sell off these loans to the treasury which pays 35% of what the home is worth, once the market swings back up, it can be sold for double quite easily turning into a profit to cover the original expense.

The money has dried up for buyers to get homes, which is crashing the value of home prices, in San Diego, our Medium has dropped 38% since last year.

Without money banks would have to raise rates so home prices would have to drop even further for them to be affordable in today's market.

Zarathustra · 09-22-2008, 02:59 AM

Quote:

Originally Posted by Rocky_Shorz

Well remember, each dollar a bank has, can turn into 9 x as much in loans, for a bank to hold a bad mortgage, they have to put money aside in reserve to cover it, which takes away 9 times as much in loan capability, that is why they are willing to dump short sales quick at a 65% loss.

If they sell off these loans to the treasury which pays 35% of what the home is worth, once the market swings back up, it can be sold for double quite easily turning into a profit to cover the original expense.

The money has dried up for buyers to get homes, which is crashing the value of home prices, in San Diego, our Medium has dropped 38% since last year.

Without money banks would have to raise rates so home prices would have to drop even further for them to be affordable in today's market.

*Fractional reserve banking is one of the principle causes of this mess, combined with a privatized central bank creating fiat currency for the government to be paid back by the people, with interest

*Assumes the market will go up

* home prices must, and will, crash, because they are too high

* rates should be higher, and would be without the self intersted manipulation of the FED, and house prices dropping further is exactly what should, and will inevitably happen

Rocky_Shorz · 09-22-2008, 03:00 AM

I had rewritten my first post, one thing I want bring up is this, The part that could help the current homeowner is this might save many from foreclosure, it's the HELOCs that have nothing to back it right now, and many are almost as large as the original mortgage. the 2nd on a short sale gets a 10% kicker to make them go away, so the banks can toss it to the Fed to get it off their books, taking a 95% hit, but frees up other money they can borrow for other loans. All a homeowner needs to do right now is stop paying the second and keep the first current... This is going to help the collapse of many families falling into foreclosure...

Once the property does sell, the Fed has a lien on it for the 5% plus whatever fees involved which once again can turn into a profit...

The banks are still getting slammed, but dumping bad debt and getting it off their books helps the whole institution.

Zarathustra · 09-22-2008, 03:05 AM

Quote:

Originally Posted by Rocky_Shorz

I had rewritten my first post, one thing I want bring up is this, The part that could help the current homeowner is this might save many from foreclosure, it's the HELOCs that have nothing to back it right now, and many are almost as large as the original mortgage. the 2nd on a short sale gets a 10% kicker to make them go away, so the banks can toss it to the Fed to get it off their books, taking a 95% hit, but frees up other money they can borrow for other loans. All a homeowner needs to do right now is stop paying the second and keep the first current... This is going to help the collapse of many families falling into foreclosure...

Once the property does sell, the Fed has a lien on it for the 5% plus whatever fees involved which once again can turn into a profit...

The banks are still getting slammed, but dumping bad debt and getting it off their books helps the whole institution.

Again, assumes the market will go up, and I repeat, those companies should fail, it would ease the INEVITABLE crash. The artificial manipulation will only intensify and prolong it, as history shows clearly. There is no benefit to the American public short, medium, or long term, though many will watch tv and believe so. The last part of your post describes what is going on here, the bankers will helped, along with their politician vassals.

fascism = profits are private, losses are social

Rocky_Shorz · 09-22-2008, 03:11 AM

Quote:

Originally Posted by Zarathustra

* rates should be higher, and would be without the self intersted manipulation of the FED, and house prices dropping further is exactly what should, and will inevitably happen

Well because you can currently buy homes at 35% of their value 2 years ago, they don't have much further to fall. New home builders have stopped because they can no longer build a home for as cheap as the market has fallen.

Much of our economy and jobs are tied to building new homes.

Imagine if new homes stop for 5-10 years, once they are ready to start building again, there won't be anyone with recent experience to do it, they will have moved to other professions. The largest builders we have, will have gone bankrupt, folded up and gone away...

Since you are knowledgeable in so many areas, what is the answer?

What would you do right now this second to turn things around?

We were 500 trades from a complete collapse of the banking system.

QUESTINY · 09-22-2008, 03:16 AM

Z and Rocky. The dollar and our markets are getting hit hard because of a rumor that Russia and China are spearheading a Eurasian currency partially backed by gold and oil. Gold up, Dow futures down 171.

Rocky_Shorz · 09-22-2008, 03:16 AM

Quote:

Originally Posted by Zarathustra

Again, assumes the market will go up, and I repeat, those companies should fail, it would ease the INEVITABLE crash. The artificial manipulation will only intensify and prolong it, as history shows clearly. There is no benefit to the American public short, medium, or long term, though many will watch tv and believe so. The last part of your post describes what is going on here, the bankers will helped, along with their politician vassals.

fascism = profits are private, losses are social

again, we were 500 trades from a complete collapse of the banking system.

The FDIC would have been empty by last Thursday and everyone in America would have had no money. No food, no gas, no clothes, nothing...

Complete collapse of America...

if this measure is just a finger in the dike, at least it is giving us time to put other options together...

QUESTINY · 09-22-2008, 03:17 AM

ASIC has suspended the Australian market open pending an announcement.

QUESTINY · 09-22-2008, 03:19 AM

Posted for fair use

Alan Kohler
Australia blows up the hedge funds
Last update 6:17 AM, 22 Sep 2008

Australia’s stunning ban on all short-selling is a revolution that will likely flow around the world in a series of dominoes from tomorrow.

The global hedge fund industry will effectively be shut down overnight.

The business of securities lending will also shut down.

The way that equities markets have operated for more than a decade will suddenly and fundamentally change from this weekend.

Once the US Securities and Exchange Commission (SEC) banned all short-selling of financial stocks on Friday – naked and covered – the Australian market was facing an impending tsunami of short-selling by hedge funds looking to lay off long positions and take leveraged bets on the downside.

France, Germany, Ireland, Switzerland, Canada, and the UK have followed the US in banning all short-selling of financial stocks. They had little choice. Asian markets will also have little choice but to follow Australia tomorrow in extending the ban to all stocks.

The danger inherent in being the only market in which the world’s long-short hedge funds are allowed to operate is simply too great. It would be like being the only person with a bleeding cut swimming in shark-infested waters.

{--snip--} http://www.businessspectator.com.au/...cument&src=sph

Zarathustra · 09-22-2008, 03:20 AM

Quote:

Originally Posted by Rocky_Shorz

Well because you can currently buy homes at 35% of their value 2 years ago, they don't have much further to fall. New home builders have stopped because they can no longer build a home for as cheap as the market has fallen.

Much of our economy and jobs are tied to building new homes.

Imagine if new homes stop for 5-10 years, once they are ready to start building again, there won't be anyone with recent experience to do it, they will have moved to other professions. The largest builders we have, will have gone bankrupt, folded up and gone away...

Since you are knowledgeable in so many areas, what is the answer?

What would you do right now this second to turn things around?

We were 500 trades from a complete collapse of the banking system.

*whatever the current percentage of home value loss, it has much further to go, probably to mid 90's levels or lower, because only then can the American whose wages have DECLINED can afford them with a fixed 30 year mortgage at interests rates that MUST be higher to stave off inflation. That and the current glut of UNSOLD houses all but guarantees that this will happen no matter what the FED and Treasury does.

Let the crash occur, it will anyway, these moves simply will make it more painful and it will last longer. Abolish the FED and return the nation to a debt free no fiat currency regulated by Congress as the document known as the Constitution mandates. Because of the criminals who have gotten us here, and we go all the way back to the year 1913 here, there is nothing to prevent severe, severe economic times. What we shouldn't do is 1) make it worse, and 2) do so while turning the nation into a fascist nation, where companies keep profits while the common man pays the losses.

Again, the crash will happen, the privatized central banking system combined with fractional reserve banking has boom and bust as its ONLY outcome. We must take the pain, and then abolish the system that got us here. Or we can relive the experience of Germany in the 30's and 40's.

Zarathustra · 09-22-2008, 03:21 AM

http://www.dailykos.com/storyonly/20...555/652/605498

Daily Kos
Wall Street bailout plan explained, universally reviled

Rocky_Shorz · 09-22-2008, 03:22 AM

Quote:

Originally Posted by QUESTINY

Z and Rocky. The dollar and our markets are getting hit hard because of a rumor that Russia and China are spearheading a Eurasian currency partially backed by gold and oil. Gold up, Dow futures down 171.

wow silver is back up 60c since I bought coins on Friday, turned 2K into 4.2K in a week.

I felt like the old wild wild west days leaving with a big ol cloth bag filled with coins...

anyone know if the Russian market opened up today, or are they still closed?

Zarathustra · 09-22-2008, 03:24 AM

FLASHBACK - Bernanke says sub-prime crisis could cost $100bn

http://www.cnbc.com/id/26656750

QUESTINY · 09-22-2008, 03:25 AM

Yes it did and their market soared 30% in the positive!!!!!

The Russian Market

Rocky_Shorz · 09-22-2008, 03:29 AM

Quote:

Originally Posted by QUESTINY

Z and Rocky. The dollar and our markets are getting hit hard because of a rumor that Russia and China are spearheading a Eurasian currency partially backed by gold and oil. Gold up, Dow futures down 171.

Wow I just realized what this means, Backed by oil means we will finally be able to move forward with free energy inventions. The government will no longer want to burn what is backing currency

Gold is understandable, but Oil is burned through at millions of barrels a day, that means overnight, Saudi Arabia is one of the richest countries in the world...

But couldn't we do the same thing by measuring the amount of oil we have including the oil fields in Alaska and offshore?

This is going to suck down the China money surplus very quickly, they import most of their oil...

We won't be speaking Chinese...

Rocky_Shorz · 09-22-2008, 03:32 AM

Quote:

Originally Posted by QUESTINY

Yes it did and their market soared 30% in the positive!!!!!

The Russian Market

incredible, so they made up their losses from last week in moments after opening...

do they have a ticket to watch their markets?

Love/Light 13 · 09-22-2008, 03:32 AM

It is obvious that the world is done with the dollar. China, Russia, and probably most of Europe for that matter are sick of dealing with US demands over the past 200 years. anything resembling the gold standard would be a step in the right direction.

Anyone read David Wilcock's new post on divinecosmos.com? He states that August 16th was significant because the Russian military seized a truck loaded with Rothschild/Illuminati documents. Wilcock states that the documents included code keys to a plethera of information.

Z or Questiny....have you heard anything on this?

also, not sure about the oil idea at all.........lets get off the oil addiction in every sense of the imagination!!

09-21-2008, 07:13 PM	#1
Zarathustra Avalon Senior Member Join Date: Sep 2008 Location: Eastern U.S. Posts: 429	The Mother Of All Frauds http://market-ticker.denninger.net/ Saturday, September 20. 2008 Posted by Karl Denninger at 23:04 The Mother Of All Frauds Well now we have it - since this is a proposed bill (public) and in the interests of fair use, here you have it as reported by Fox: LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY TO PURCHASE MORTGAGE-RELATED ASSETS Section 1. Short Title. This Act may be cited as ___________________. Sec. 2. Purchases of Mortgage-Related Assets. (a) Authority to Purchase.—The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States. (b) Necessary Actions.—The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation: (1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties; (2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts; (3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them; (4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and (5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act. Sec. 3. Considerations. In exercising the authorities granted in this Act, the Secretary shall take into consideration means for— (1) providing stability or preventing disruption to the financial markets or banking system; and (2) protecting the taxpayer. Sec. 4. Reports to Congress. Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3. Sec. 5. Rights; Management; Sale of Mortgage-Related Assets. (a) Exercise of Rights.—The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act. (b) Management of Mortgage-Related Assets.—The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom. (c) Sale of Mortgage-Related Assets.—The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act. (d) Application of Sunset to Mortgage-Related Assets.—The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9. Sec. 6. Maximum Amount of Authorized Purchases. The Secretarys authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time Sec. 7. Funding. For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure. Sec. 8. Review. Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency. Sec. 9. Termination of Authority. The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act. Sec. 10. Increase in Statutory Limit on the Public Debt. Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000. Sec. 11. Credit Reform. The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable. Sec. 12. Definitions. For purposes of this section, the following definitions shall apply: (1) Mortgage-Related Assets.—The term mortgage-related assets means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008. (2) Secretary.—The term Secretary means the Secretary of the Treasury. (3) United States.—The term United States means the States, territories, and possessions of the United States and the District of Columbia. I'm speechless. Let's disassemble this monster piece by piece. First, this is a de-facto nationalization of the entire banking, insurance, and related financial system. Specifically: "(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;" That's right - every bank and other financial institution in the United States has just become a de-facto organ of the United States Government, if Hank Paulson thinks they should be, and he may order them to do virtually anything that he claims is in furtherance of this act. This might include things like demanding that a bank or other financial institution sell him its paper, even if it forces that firm to collapse and be assumed by the FDIC! You didn't buy any bank stocks last week did you? "(a) Authority to Purchase.—The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States." This, at first blush, would seem to indicate that only American firms would be covered. Nothing is further from the truth. If the Chinese wish to unload some of their purchased toxic sludge they merely sell it to, oh, Goldman Sachs for 40 cents on the dollar and then Goldman sells it to the Treasury for 50. This, under the black letter of the law here, is perfectly legal, which means that one must assume that Paulson will in fact foist off all the bad paper on world markets that was originally based on a mortgage in the United States, while allowing his banker buddies here to loot the taxpayer by acting as an intermediary in the transaction! "(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;" Contracts can (and presumably will) be "no bid, no solicitation" and given to whomever Secretary Paulson favors, without regard to the public interest or normal competitive bidding processes. Must be nice to be a "Friend of Hank." "In exercising the authorities granted in this Act, the Secretary shall take into consideration means for— (1) providing stability or preventing disruption to the financial markets or banking system; and (2) protecting the taxpayer." Notice which comes first. "(c) Sale of Mortgage-Related Assets.—The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act." Having bought these securities for any price Mr. Paulson would like (and he can compel institutions to sell at his demanded price as noted above!) he can then sell those assets at any price he wishes, to anyone he wishes. It certainly is nice to be a "Friend of Hank", and it most certainly sucks if you're not. "The Secretarys authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time" This is clever and nobody in the mainstream media has figured it out. If you think the cost of this bill is $700 billion, you're wrong. The cost is actually infinite and the entire bill constitutes a giant money-laundering scheme. Paulson can (and presumably will) buy up to $700 billion of these "assets", then sell them. Let's say he decides to buy them at 60 cents on the dollar and sell them for 10. You, the taxpayer, will eat the fifty cents, for an immediate cost of $350 billion dollars. Having done so, he is then authorized to do so again, since the $700 billion is no longer on the government's balance sheet. In fact, he can do this without limit, other than possibly due to the federal debt ceiling, which of course Congress will raise any time we get close to it. Oh yeah, this bill does that right up front too. No need to bother with it the first time around. Folks, $700 billion isn't even close to the total cost of this monster. If Paulson and his successor decide to, they could literally cycle all $5.3 trillion of Fannie and Freddie's debt through this scheme, potentially sticking the taxpayer for 20% or more of the total, plus as much private debt on various bank balance sheets as they can manage to nationalize until (and possibly beyond) the point where the bond market tells him to go to hell. Bottom line: This bill gives Paulson the ability to nationalize an UNLIMITED amount of private debt and force YOU AND YOUR CHILDREN to pay for it. Sec. 8. Review. Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency. If you are a bank, investor, or other entity who is forcibly gang-raped by Secretary Paulson due to his actions as "King" (crowned by Congress) under this law, you are unable to seek redress in the courts or by administrative action. The claim is that this is intended to "promote confidence and stability" in the financial markets. It will do no such thing. It will instead strike terror into the hearts of investors worldwide who hold any sort of paper, whether it be preferred stock, common stock or debt, in any financial entity that happens to be domiciled in the United States, never mind the potential impact on Treasury yields and the United States sovereign credit rating. I predict that if this passes it will precipitate the mother and father of all financial panics, although exactly when the "short bus" riders who inhabit the equity market will figure it out remains to be seen. If they have an IQ larger than their shoe size it will commence at 9:30:01 AM Monday morning, although given history and the lack of intelligence displayed by the crooning media market euphoria may continue until the first couple of firms are dismantled by Paulson's newly-crowned Kingly powers with the scraps handed out to his favored few. The best part of this outrageous fraud is that those who get bent over the table can't even sue - their only recourse will be the (literal) deployment of pitchforks and torches. That Paulson and Bernanke circulated this document, irrespective of what actually gets reported out onto the floor of the House and Senate (if anything) tells you everything you need to know about his intentions and the safety of your financial assets in the United States markets. That this "proposal" hasn't resulted in Congress calling for both Bernanke and Paulson to resign for their blatant attempt to crown Paulson King tells you everything you need to know about Congressional integrity as well. My advice: Don't be caught with any stock or debt instruments linked to a United States financial firm in your portfolio past 9:30 AM Monday morning.

09-22-2008, 01:07 AM	#2
MyShadow Avalon Senior Member Join Date: Sep 2008 Location: California Posts: 144	Re: The Mother Of All Frauds There appears to be another conundrum here for Main Street. Let's say I have one of these crappy mortgages but not in default (I don't but just an example). My bank reviews risk and see's that the LTV is risky due to declining values. My bank decides to cut bait and put my mortgage into the "program". I didn't agree contractually that my mortgage could be "assigned" to the US Gov't and be auctioned off at 50% or whatever. The US Gov't wants to be admonished from litigation if this goes down - so it's between me and the bank. Lets say I loose in this battle. Then I loose all of my equity, and I loose the property. I'm out on the street. The bank gets 50%, and then the US Gov't gets the property and sells it, maybe later, and gets back the 50% paid to the bank, and makes a profit - which goes back into the system , maybe to address national debt or such. This is all good for the bank and US Gov't - but Main Street is 'f-ed'. WTF? This is just more of the Elite scheme at play. Oh - and here is another sick twist to this. Lets say my bank that holds the mortgage is one of those "failed" banks like IndyMac or such that is now owned by the US Gov't. They could now legally sit there and flip these houses for profit. There is alot of incentive for them to do that - it's a win win for them. But we get 'f-ed'. WTF? Z - This is more than the mother of all frauds. It's the mother f-ing fraud of all time. Sorry - about my f-bombs! MyShadow Last edited by MyShadow; 09-22-2008 at 01:15 AM.

09-22-2008, 01:41 AM	#3
Zarathustra Avalon Senior Member Join Date: Sep 2008 Location: Eastern U.S. Posts: 429	Re: The Mother Of All Frauds M, That's what people don't understand, or there would be 50,000 rioting in the streets of N.Y. and Washington tomorrow morning. Not only is it the greatest financial fraud ever executed in the history of this country, perhaps the world, it is being done by those who have "sworn" to uphold the Constitution and protect and serve the people of the United States. As I have said elsewhere, the trials of Neuremburg would be to kind of a fate for these vile, criminal traitors. Z

09-22-2008, 02:32 AM	#6
Zarathustra Avalon Senior Member Join Date: Sep 2008 Location: Eastern U.S. Posts: 429	Re: The Mother Of All Frauds http://news.yahoo.com/s/ap/bank_change Last major investment banks change status Great, now they can rape and pillage another market, and recieve FED loans while doing it. This is madness happening right before our eyes!

09-22-2008, 03:00 AM	#11
Rocky_Shorz Avalon Senior Member Join Date: Sep 2008 Location: USA Posts: 1,098	Re: The Mother Of All Frauds I had rewritten my first post, one thing I want bring up is this, The part that could help the current homeowner is this might save many from foreclosure, it's the HELOCs that have nothing to back it right now, and many are almost as large as the original mortgage. the 2nd on a short sale gets a 10% kicker to make them go away, so the banks can toss it to the Fed to get it off their books, taking a 95% hit, but frees up other money they can borrow for other loans. All a homeowner needs to do right now is stop paying the second and keep the first current... This is going to help the collapse of many families falling into foreclosure... Once the property does sell, the Fed has a lien on it for the 5% plus whatever fees involved which once again can turn into a profit... The banks are still getting slammed, but dumping bad debt and getting it off their books helps the whole institution.

09-22-2008, 03:16 AM	#14
QUESTINY Avalon Senior Member Join Date: Sep 2008 Location: Nebraska Posts: 407	Re: The Mother Of All Frauds Z and Rocky. The dollar and our markets are getting hit hard because of a rumor that Russia and China are spearheading a Eurasian currency partially backed by gold and oil. Gold up, Dow futures down 171.

09-22-2008, 03:17 AM	#16
QUESTINY Avalon Senior Member Join Date: Sep 2008 Location: Nebraska Posts: 407	Re: The Mother Of All Frauds ASIC has suspended the Australian market open pending an announcement.

09-22-2008, 03:19 AM	#17
QUESTINY Avalon Senior Member Join Date: Sep 2008 Location: Nebraska Posts: 407	Re: The Mother Of All Frauds Posted for fair use Alan Kohler Australia blows up the hedge funds Last update 6:17 AM, 22 Sep 2008 Australia’s stunning ban on all short-selling is a revolution that will likely flow around the world in a series of dominoes from tomorrow. The global hedge fund industry will effectively be shut down overnight. The business of securities lending will also shut down. The way that equities markets have operated for more than a decade will suddenly and fundamentally change from this weekend. Once the US Securities and Exchange Commission (SEC) banned all short-selling of financial stocks on Friday – naked and covered – the Australian market was facing an impending tsunami of short-selling by hedge funds looking to lay off long positions and take leveraged bets on the downside. France, Germany, Ireland, Switzerland, Canada, and the UK have followed the US in banning all short-selling of financial stocks. They had little choice. Asian markets will also have little choice but to follow Australia tomorrow in extending the ban to all stocks. The danger inherent in being the only market in which the world’s long-short hedge funds are allowed to operate is simply too great. It would be like being the only person with a bleeding cut swimming in shark-infested waters. {--snip--} http://www.businessspectator.com.au/...cument&src=sph

09-22-2008, 03:21 AM	#19
Zarathustra Avalon Senior Member Join Date: Sep 2008 Location: Eastern U.S. Posts: 429	Re: The Mother Of All Frauds http://www.dailykos.com/storyonly/20...555/652/605498 Daily Kos Wall Street bailout plan explained, universally reviled

09-22-2008, 03:24 AM	#21
Zarathustra Avalon Senior Member Join Date: Sep 2008 Location: Eastern U.S. Posts: 429	Re: The Mother Of All Frauds FLASHBACK - Bernanke says sub-prime crisis could cost $100bn http://www.cnbc.com/id/26656750

09-22-2008, 03:25 AM	#22
QUESTINY Avalon Senior Member Join Date: Sep 2008 Location: Nebraska Posts: 407	Re: The Mother Of All Frauds Yes it did and their market soared 30% in the positive!!!!! The Russian Market

09-22-2008, 03:32 AM	#25
Love/Light 13 Avalon Senior Member Join Date: Sep 2008 Location: Long Island, NY Posts: 128	Re: The Mother Of All Frauds It is obvious that the world is done with the dollar. China, Russia, and probably most of Europe for that matter are sick of dealing with US demands over the past 200 years. anything resembling the gold standard would be a step in the right direction. Anyone read David Wilcock's new post on divinecosmos.com? He states that August 16th was significant because the Russian military seized a truck loaded with Rothschild/Illuminati documents. Wilcock states that the documents included code keys to a plethera of information. Z or Questiny....have you heard anything on this? also, not sure about the oil idea at all.........lets get off the oil addiction in every sense of the imagination!!