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Gold bars, future oil, cotton ain’t gonna hire Joe the Plumber November 8, 2010

Posted by WillardWhyte in Economy, Politics, Wall Street.
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I found this take on Ben’s money-move to be quite on target. This in particular from Richard Fisher, president of the Fed bank in Dallas:

I could envision such action would lead to a declining dollar, encouraging further speculation, provoking commodity hoarding, accelerate the transfer of wealth from the deliberate save and unfortunate, and possibly place at risk the stature and importance of the Fed.

But Ben knows this, just as he knows that the odds of monetary policy stimulating job growth and greater consumption in the U.S. are extremely long.  It’s his only play, knowing now the fiscal side is headed toward the austerity solution demanded by the voters, ostensibly. And that will take billions out of circulation in 6-8 months.

With no new wage growth on the horizon at anything but the top end, throwing accelerant on commodities and equities and potential bubbles abroad is intentioally destablizing, a sort of drop-the-gloves-and-hope-the-sparks-fly approach that depends on some of the embers landing in the deadwood and warming many.

But Ben undervalues the monkey still perched on the back of money markets —  the jonesing for fast money made with money, not output of goods and services in demand. The dice and spinning wheels and flashing lights still draw the biggest crowd, and garner the loudest roars from the onlookers.

It’s going to help some folks make a good chunk of change on the house, Ben. That’s about it, because a “real job” is still the chump play.

The folks sitting on the mounds of cash are not coming off until your cheap money is all gone and it becomes clear the only way to make money is the old-fashioned way.

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Maybe there’s a reason it’s called FOX News September 1, 2010

Posted by WillardWhyte in Economy, Greed, Justice, Politics.
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I see that former Wachovia Corp. Chief Executive Officer Robert Steel is telling the Financial Crisis Inquiry Commission today that he was told by FDIC Chairman Sheila Bair in late Setptember, 2008 to find a dance partner with something left in its pockets, because the mortgage crap it was holding threatened the U.S. banking system.

This Bloomberg News story tells the early tale. Make particular note of this:

Steel, the former U.S. Treasury Department and Goldman Sachs Group Inc. executive, was brought in to lead Charlotte, North Carolina-based Wachovia in 2008 as the lender struggled to recover from the aftermath of its $24 billion purchase of Golden West Financial Corp. The deal saddled Wachovia with about $120 billion of adjustable-rate mortgages that allowed borrowers to skip some interest payments and add them to the loan balance. The concept assumed home prices would go up. Instead, the idea backfired when prices fell, leaving borrowers with mortgages that exceeded the value of their homes and Wachovia with mounting losses.

That’s $120 billion in garbage interest-only and other high-risk mortgages created by the bankers in California to pump new money into the superheated real estate market driven by flippers and other speculators. BIG NOTE: This was not done by government; it was done by the private sector, at the end stage aided and abetted by Fannie Mae and Freddie Mac, also at the time privately held and run by financial industry veterans.

So please don’t swallow the myth being spun — and heavily marketed by Wall Street — that the bubble slime on all of US was OUR fault because of actions by OUR government. It’s just not true.

Sure, many of US were sucked into the interest-only crap, or steered into liar loans.  And many of US benefited from the housing boom, which put a lot of people to work for a very long time making houses, selling houses and producing all the materials that went into what was a major part of the U.S. economy for two decades.

That’s almost all gone now folks — and no amount of “tax cuts” and “getting government off our backs” is going to bring it back. Something else must be built to take its place, and that’s a whole lot harder and will take a long time. Everyone running for Congress needs to explain in detail how they plan to make that rebuilding happen.

We all should watch what is said before this commission and make sure this story is told fully, extensively — and accurately.

Because what all fell down in September 2008 — and the people who made that happen and reasons for it — is why we still are struggling today — and will for the next five years — to rebuild our economy.

And it wasn’t our fault;  it wasn’t our government’s fault. It was the fault of recklessness, greed and fraud by private industry leadership. And many of those foxes want to be put back in charge of the hen house.