This morning the fed announces it's latest scheme to resurrect the dying American economy. I call it a scheme because it definitely isn't a plan. This time it is Tim Geithner's proposal (scheme) for the fed and treasury to create a new mechanism (scheme) for the "buying up of toxic assets."
Isn't that a novel way of identifying worthless paper? We will just call them toxic assets and suddenly the world is a better and safer place. Because that is precisely what we are talking about. Making the world a safer place once again, after the powers that be in government have succeeded in screwing it up once again in the first place.
Bundles and bundles of worthless mortgages on foreclosed properties that banks were forced to make by the government in the first place, were bundled into worthless pieces of paper that we now have to figure out what to do with before they choke the system to death. Properties that at best will draw 30% of their original value (now) are going to be what? Re-bundled into more appealing bundles of horse hockey?
And the federal Government can't buy up all this loss by themselves,not even when they are printing the money to do it. Because they don't have the tangible assets to back it up with. Not even when they leverage it at 100 to 1. Which leads to the interesting revelation revealed below.
“We share an upside,” said an official, who declined to estimate the amount of loans and securities that could be purchased in the programs or estimate potential profits or losses for taxpayers. But “if we do poorly, they [investors] will do poorly as well,” he said.
Here is a clue scooter..... "If the investors do poorly? Everyone does poorly!" When the investors are driven to ground and driven from the markets by government idiocy and government socialist Tom foolery? The entire system suffers and collapses! When the investors and those who actually create jobs and wealth are penalized and demonized for the sake of socialist Utopian dream worlds and socialist models? Everyone suffers! Including and especially those supposedly insulated government bureaucrats that think they know how to strangle the golden geese in perpetuity!
Personally? I am of the same mind as some of the paid analysts and economists this morning. These corporate managers and investment bankers have been sitting quietly for the past several weeks while the banshees of government socialism wailed and railed against supposed corporate greed and the AIG bailout.
But now these real masters of the universe are about to get their opportunity to level the playing field between them and government socialist ideology once again. For without the money and finances and economic expertise of these people in the real world of finance, the government can do nothing but further drive the economy into the ground. They certainly cannot resolve or reconcile these "toxic assets" that they themselves created without the help of those who hold the real wealth in the world.
Therefore, watch as the real leverage is brought to bear on Obama and Geithner and the rest of these socialist grease monkeys this week. The big boys with the money on the side lines, are not going to continue to play these games with Obama and his crew. Or with Pelosi and that band of rogues. There will either be concessions and "understandings" reached between these corporations and the government on these "bonuses" and who has say so over what their people are paid?
Or these moguls will literally let the whole damn thing go down the tubes, after which they will come back and pick up the pieces after it is all over with and the government has collapsed around itself.
Something people need to realize? Even this socialist crew that inhabits the White House and congress at the moment, is that there is an old adage that best represents the reality of business.
"Money talks and BS walks."
And when the real money of the world has had enough of the touchy feely world of neuvo-socialism? They will balk and they will bite back and they will make things extremely painful for all. For the power to really change things resides with those who hold and turn the screws on the people. And when you make them hurt? They will make you hurt. And they will make you hurt badly.
It's as simple as that.