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Greenspan: Patron Saint of America's Affluentocracy

US Politics & Gov't (tags: greenspan, corporatism, economy, federal reserve )

Michael
- 81 days ago - populistamerica.com

Already six to nine months into the recession, government leaders are still telling us that it is just a period of slow growth, a pit stop in this economic race that we'll eventually win, so worry not, my friend. That explains to us what "garbage numbers"

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Comments

Blue Bunting (761)

Sunday September 14, 2008, 2:20 pm
"Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild

Blue Bunting (761)

Saturday September 20, 2008, 4:19 pm
John Cole: "I do not ever want to hear another damned word about the free market. I don't want to hear another thing about letting the market regulate itself. I don't want to hear about the free flow of capital. I don't want to hear about government getting out of our lives. None of it. From superfunds to super-bailouts, I am tired of other people getting rich being irresponsible and then being told I have to pay to clean it up. I didn't read one punitive aspect of this new plan. Not one punishment for the people who did this."

Blue Bunting (761)

Wednesday September 24, 2008, 11:04 pm
Timing ...

naked capitalism: On the dishonest sale of the bailout plan

Yes ... the Bu$hie$ were sitting on this plan; waiting for the right opportunity ... 41 days before ELECTION DAY.

Blue Bunting (761)

Saturday September 27, 2008, 4:39 pm
The crisis explained

Joe goes to the track and bets $2 on a horse.

Two guys standing nearby get into a discussion and Fred says to Sam, “I’ll bet you $5 that Joe wins his bet.”

Next to them are Bill and Bob. Bill says: “I’ll bet you $10 that Fred welshes on his bet if he loses.”

Next to them is Sally. Sally says: “For $3 I’ll guarantee to Bill that if Bob fails to pay off, I’ll make good on the bet.”

Sally then goes to Mary and borrows the $7 needed in case she has to ever pay off and promises to pay back $8. She doesn’t expect to every have to pay since she believes Bob will always make good. So she expects to net $2 no matter what happens to Joe.

A quick calculation indicates that there is now 2+5+10+3+7 = $27 riding on the outcome of the horse race.

Question how much has been “invested” in the horse race?

Wait for it:

Answer:

$50,000 by the owner of the horse who is expecting to recoup his investment from the winnings of the horse and other future deals. Everyone else is gambling, not investing.

So, when Hank Paulson and his golfing buddies go to the track and lose the rent money playing the ponies, we should pay up?

http://www.correntewire.com/the_crisis_explained

That's perfect
and it’s not even an analogy - it’s exactly how derivitives and credit default swaps work, including none of the gamblers having any financial relationship to the underlying asset (the horse, or mortgages) in a lot of cases.