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Occupy Wall St.

October 1, 2011

The networks are finally covering the “Occupy wall st.” protests. “When will these people stop wasting tax payer dollars” this fuck anchor actually said that. What an ass face.
The cost, and potential cost of bailing out banks is a bit more than cleaning up trash after a protest. You ass.

The mistake was not the allowing Lehman to fail – but not allowing markets learn a lesson and make necessary changes. The ensuing Govt action negated the potential positive affects of failure.

Let Greece fail.
Don’t pass the buck to tax payers. Enflict pain on the idiots who lent to Greece. STOP THE BAIL OUTS STOP THE FUCKING BAIL OUTS

End o big to fail.

Big banks suck. I know. I work for one. Break up the banks! Don’t think big banks have an advantage? The term “systemically important” is a fucking joke. When reviewing potential custodian banks at my job Credit tells me. “I’d avoid That bank. They are not systemically important”.. Yup – implicit govt support is an advantage to big banks. The Fed will dole out free cash.
What if the Fed were unable to support the market?? The deficit is big, and big news nowadays and anything that will increase the deficit is a certain no no. The Federal Reserve has tripled their balance sheet to $2.7 trillion. Has moved out on the curve and is leveraged 55 to 1 – twice the leverage of Bear Stearns and Lehman Brothers when they failed. If they buy treasuries at RECORD high prices – even a slight decline in the value of their assets wipes out their capital – if inflation picks up and they need to sell treasuries.. Well expect heavy heavy losse sent to the treasury – adding to the deficit.

So what will the traders do if the Fed allows the markets to act freely?


The reversal of the great Moral hazard trade.

Below are taken from various articles:

The Fed has created a “mutant capitalism” Jack Bogle warned of in “The Battle for the Soul of Capitalism.”

If greed, corruption, stupidity and fraud has created an economic colamity – then lets just deal with it instead of pretending by printing money.

In a Newsweek special “Seeing Shades of the 1930s,” Dan Gross wrote: “Wall Street, after two terms of a business-friendly Republican president, self-immolated on a pyre of greed, incompetence and excessive optimism.” Today’s “new normal” economy means high unemployment for years, inflation driving prices, rising interest rates, more debt, chaos.

Is there such a thing as a Good Depression?

Yes. We need to purge ourselves of the corruption and expose our self-destructing policies.

Depression will stir outrage, force real reforms. Writing in the Wall Street Journal, Jim Grant, editor of the Interest Rate Observer, wrote: “Why No Outrage? Through history, outrageous financial behavior has been met with outrage. But today Wall Street’s damaging recklessness has been met with near-silence, from a too tolerant populace.” Grant worries that Wall Street will run “itself and the rest of the American financial system right over a cliff.”

“throw the bums out”

Depression forces Wall Street to re-think their ways.

In a powerful Bloomberg Markets feature, “No Easy Fix,” we’re told Wall Street’s “profit formula has hit a wall.” Their “money-making machine is broken and efforts to repair it after the biggest losses in history are likely to undermine profits.”

“Even Mad Money’s Jim Cramer openly admits hedge fund managers are pocketing megaprofits at capital gains rates while laughing at the stupidity of a broken political system that gives hundreds of billions in tax breaks to the richest, then takes taxes off the table as our middle class is dying under massive unsustainable deficits. Soon angry mobs will “fix” Wall Street.”

400 Americans make up 10% of capital

“The total credit market debt in the U.S. is $52.6 trillion, $200 billion higher than it was in 2008. If those who had collected billions in fraudulent profits while using unprecedented levels of debt were rightfully required to take responsibility for the catastrophe they caused, the debt levels would have dropped dramatically. The losses would have been borne by those responsible. The economy would have taken a body blow, all Americans would have been hurt, and many billionaires would have become millionaires or even paupers. The debt would have been written off and lessons would have been learned. The remaining banks (there are 8,000 others besides the 10 who control 50% of the deposits) would have followed traditional risk mitigation methods and the economy would have recovered. 
Wall Street banks used their power and wealth to convince the SEC to waive the 12 to 1 leverage rules so they could leverage their balance sheets 40 to 1. This meant that a 5% loss in their capital and they would be insolvent. The Harvard MBA CEO titans of the financial world created the housing bubble through their creation of fraud inducing mortgage products, a bewildering array of derivative products that even their MBA geniuses didn’t understand, and betting against the derivatives they were selling to their clients. When this toxic brew of fraud and debt exploded in their faces, the value of the assets on their books plunged by 30% to 40% in 2008 and 2009. The 10 biggest financial institutions in the country were effectively bankrupt. An orderly bankruptcy liquidation that wiped out the bondholders, stockholders and top executives was the solution to excessive risk taking and failure.  Without Federal Reserve intervention in the financial markets since September 2008, the biggest banks in the world would have entered bankruptcy liquidation. The U.S. economy would have experienced a 10% to 20% fall in GDP. The unemployment rate would have soared above 15%. The stock market would have fallen 70%. Wealthy bondholders and stockholders would have seen their wealth cut in half. Incumbent politicians would have all been thrown out of office. The richest Americans, constituting the ruling class, would have borne the brunt of the pain.

In a true capitalist system, organizations and people who assumed too much risk and made poor decisions would have failed. But the United States does not have a capitalist system. We have a corporate fascist economic system where a small cartel of bankers, military weapons suppliers, and mega-corporations set the agenda for the country through their complete capture of politicians and the mainstream corporate media. At the height of the crisis in 2008, President George Bush revealed whose side he chose:

“I’ve abandoned free-market principles to save the free-market system, to make sure the economy doesn’t collapse. I feel a sense of obligation to my successor to make sure there is not a, you know, a huge economic crisis. Look, we’re in a crisis now. I mean, this is — we’re in a huge recession, but I don’t want to make it even worse.”

Cheaper borrowing costs, another result of lower interest rates, were supposed to induce more borrowing by business, presumably to buy capital goods and hire employees. But commercial and industrial loans continue to fall, according to data provided by the Federal Reserve Bank of St. Louis, and unemployment remains high. 

Meanwhile, household buying power has been dented by the sharp rise in prices to which I referred above. Retail prices in total are nearly 3% above where they were a year ago, led by soaring food and energy tags — items that people buy and use every day. Since the end of 2010, consumer prices have actually risen twice as fast. 

Prices are outstripping wages. Average hourly earnings for all employees on private nonfarm payrolls were unchanged in March and less than 2% higher than they were a year earlier. 

Those who managed to eke out some savings have been rewarded by near-zero interest rates — another byproduct of the Fed’s extraordinarily easy monetary policy. While young families have a long-enough time horizon to invest in the stock market, seniors are usually best advised to stick to relatively safe, fixed-income investments. 

As you might imagine, seniors are the biggest losers from the Fed’s easy-money policy. Their fixed incomes are constantly losing buying power while their savings accounts earn virtually nothing. 
Lisa Murphy of Bloomberg interviewed the chairman of the now defunct FCIC, Phil Angelides to discuss the findings presented yesterday by Carl Levin. The topic was the “greased pig” that is Wall Street. The conclusion is that America now has a dual justice system: “One for ordinary people and then one for people with money and enormous wealth and power.” As for crime deterrents, considering that to this day not one person has gone to prison, even an idiot can foresee what Angelides has to say on this issue: “To the extent laws were broken, we need deterrents.If someone robs a 7-11, they took $500 and they were able to settle the next day for $50 and no admission of wrongdoing, they’d knock over that 7-11 again. And we’ve seen time after time where people and firms have made tens, one hundreds, billions of dollars. They’ve settled charges for pennies on the dollar. At Citigroup for example they represented that they had $13 billion of subprime mortgage exposure when they really had $55 billion. The penalty to the chief financial officer who made $19 million that year, 2007, was $100,000. Goldman was fined $500 million but the date they settled their stock moved up $2 billion. There’s been no real consequence.” Too bad there is no acknowledgment that it is people like Angelides who through their corrupt behavior over the years allowed Wall Street to singlehandedly usurp the democratic process and replace it with that of a fascist corporatocracy. But that’s irrelevant: at some point, sooner or later, the American peasantry will snap. Maybe not tomorrow, maybe not the day after the Apple borg hypnosis ends, and the fascination with American Idol expires, but at some point thereafter, absolutely. And the primary reason will be the glaring trampling of the tenets contained in both the Declaration of Independence and Constitution, by the kleptocratic “superclass.” Then what happens when the billions of ones and zeros held in some bank vault and imparting some ephemeral monetary greatness to these people, finally is exposed for the sham it is, and they have nothing to protect them from the hordes of hungry, angry and very well armed? We can only hope they will be able to bribe their way to the top in that world order as well as they can in the current one. Somehow we doubt it.”


3 Comments leave one →
  1. Amelia permalink
    October 2, 2011 10:45 am


  2. October 2, 2011 2:59 pm

    No one wants to admit the ship is sinking till the water hits their chin.

  3. October 7, 2011 10:44 am

    End too big to fail, that’s all.

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